Correlation Between Lord Abbett and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Lord Abbett 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 Lord Abbett and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Intermediate and Dodge Cox Income, you can compare the effects of market volatilities on Lord Abbett 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 Lord Abbett with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Dodge Cox.
Diversification Opportunities for Lord Abbett and Dodge Cox
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Dodge is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Intermediate and Dodge Cox Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Income and Lord Abbett 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 Lord Abbett Intermediate 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 Income has no effect on the direction of Lord Abbett i.e., Lord Abbett and Dodge Cox go up and down completely randomly.
Pair Corralation between Lord Abbett and Dodge Cox
Assuming the 90 days horizon Lord Abbett is expected to generate 8.11 times less return on investment than Dodge Cox. But when comparing it to its historical volatility, Lord Abbett Intermediate is 2.08 times less risky than Dodge Cox. It trades about 0.03 of its potential returns per unit of risk. Dodge Cox Income is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,236 in Dodge Cox Income on November 5, 2024 and sell it today you would earn a total of 10.00 from holding Dodge Cox Income or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Intermediate vs. Dodge Cox Income
Performance |
| Timeline |
| Lord Abbett Intermediate |
| Dodge Cox Income |
Lord Abbett and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Dodge Cox
The main advantage of trading using opposite Lord Abbett and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett 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.| Lord Abbett vs. Sp Smallcap 600 | Lord Abbett vs. Kinetics Small Cap | Lord Abbett vs. Oklahoma College Savings | Lord Abbett vs. Lebenthal Lisanti Small |
| Dodge Cox vs. Leader Short Term Bond | Dodge Cox vs. Fidelity Flex Servative | Dodge Cox vs. Transam Short Term Bond | Dodge Cox vs. Virtus Multi Sector Short |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |