Correlation Between Miller Vertible and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Miller Vertible 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 Miller Vertible and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miller Vertible Bond and Dodge Cox Stock, you can compare the effects of market volatilities on Miller Vertible 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 Miller Vertible with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Vertible and Dodge Cox.
Diversification Opportunities for Miller Vertible and Dodge Cox
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Miller and Dodge is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Miller Vertible Bond 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 Miller Vertible 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 Miller Vertible Bond 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 Miller Vertible i.e., Miller Vertible and Dodge Cox go up and down completely randomly.
Pair Corralation between Miller Vertible and Dodge Cox
Assuming the 90 days horizon Miller Vertible Bond is expected to generate 0.55 times more return on investment than Dodge Cox. However, Miller Vertible Bond is 1.82 times less risky than Dodge Cox. It trades about 0.15 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about -0.17 per unit of risk. If you would invest 1,285 in Miller Vertible Bond on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Miller Vertible Bond or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miller Vertible Bond vs. Dodge Cox Stock
Performance |
| Timeline |
| Miller Vertible Bond |
| Dodge Cox Stock |
Miller Vertible and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miller Vertible and Dodge Cox
The main advantage of trading using opposite Miller Vertible and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miller Vertible 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.| Miller Vertible vs. Miller Vertible Bond | Miller Vertible vs. Miller Vertible Bond | Miller Vertible vs. Miller Market Neutral | Miller Vertible vs. Miller Intermediate Bond |
| Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Aqr Large Cap | Dodge Cox vs. Fisher Large Cap |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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