Correlation Between Great West and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Great West 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 Great West and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Loomis Sayles and Dodge Cox Stock, you can compare the effects of market volatilities on Great West 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 Great West with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Dodge Cox.
Diversification Opportunities for Great West and Dodge Cox
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Great and Dodge is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Great West Loomis Sayles 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 Great West 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 Great West Loomis Sayles 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 Great West i.e., Great West and Dodge Cox go up and down completely randomly.
Pair Corralation between Great West and Dodge Cox
Assuming the 90 days horizon Great West is expected to generate 1.65 times less return on investment than Dodge Cox. In addition to that, Great West is 1.35 times more volatile than Dodge Cox Stock. It trades about 0.18 of its total potential returns per unit of risk. Dodge Cox Stock is currently generating about 0.4 per unit of volatility. If you would invest 25,973 in Dodge Cox Stock on November 5, 2024 and sell it today you would earn a total of 1,331 from holding Dodge Cox Stock or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Loomis Sayles vs. Dodge Cox Stock
Performance |
| Timeline |
| Great West Loomis |
| Dodge Cox Stock |
Great West and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Dodge Cox
The main advantage of trading using opposite Great West and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West 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.| Great West vs. Smallcap World Fund | Great West vs. Small Cap Equity | Great West vs. Locorr Dynamic Equity | Great West vs. The Growth Equity |
| Dodge Cox vs. Chartwell Short Duration | Dodge Cox vs. One Choice Portfolio | Dodge Cox vs. Needham Aggressive Growth | Dodge Cox vs. The Hartford High |
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.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |