Correlation Between Nationwide Bailard and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Nationwide Bailard 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 Nationwide Bailard and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Bailard International and Dodge Cox Stock, you can compare the effects of market volatilities on Nationwide Bailard 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 Nationwide Bailard with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Bailard and Dodge Cox.
Diversification Opportunities for Nationwide Bailard and Dodge Cox
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nationwide and Dodge is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bailard Internation 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 Nationwide Bailard 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 Nationwide Bailard International 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 Nationwide Bailard i.e., Nationwide Bailard and Dodge Cox go up and down completely randomly.
Pair Corralation between Nationwide Bailard and Dodge Cox
Assuming the 90 days horizon Nationwide Bailard International is expected to under-perform the Dodge Cox. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nationwide Bailard International is 1.05 times less risky than Dodge Cox. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Dodge Cox Stock is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 27,361 in Dodge Cox Stock on September 1, 2024 and sell it today you would earn a total of 1,444 from holding Dodge Cox Stock or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nationwide Bailard Internation vs. Dodge Cox Stock
Performance |
| Timeline |
| Nationwide Bailard |
| Dodge Cox Stock |
Nationwide Bailard and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Bailard and Dodge Cox
The main advantage of trading using opposite Nationwide Bailard and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Bailard 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.The idea behind Nationwide Bailard International and Dodge Cox Stock pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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