Correlation Between Kinetics Paradigm and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Dodge Cox at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kinetics Paradigm and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Paradigm Fund and Dodge Cox Stock, you can compare the effects of market volatilities on Kinetics Paradigm and Dodge Cox and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kinetics Paradigm with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Dodge Cox.
Diversification Opportunities for Kinetics Paradigm and Dodge Cox
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Dodge is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Dodge Cox Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Stock and Kinetics Paradigm is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kinetics Paradigm Fund are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Stock has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Dodge Cox go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Dodge Cox
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.41 times more return on investment than Dodge Cox. However, Kinetics Paradigm is 3.41 times more volatile than Dodge Cox Stock. It trades about 0.51 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about 0.15 per unit of risk. If you would invest 11,238 in Kinetics Paradigm Fund on August 27, 2024 and sell it today you would earn a total of 4,289 from holding Kinetics Paradigm Fund or generate 38.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Dodge Cox Stock
Performance |
| Timeline |
| Kinetics Paradigm |
| Dodge Cox Stock |
Kinetics Paradigm and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Dodge Cox
The main advantage of trading using opposite Kinetics Paradigm and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Dodge Cox can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Kinetics Paradigm vs. T Rowe Price | Kinetics Paradigm vs. Rbb Fund Trust | Kinetics Paradigm vs. Kinetics Global Fund | Kinetics Paradigm vs. Dodge Global Stock |
| Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Total Return Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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