Correlation Between Oakmark Global and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Oakmark Global 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 Oakmark Global and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Global Select and Dodge Global Stock, you can compare the effects of market volatilities on Oakmark Global 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 Oakmark Global with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Global and Dodge Cox.
Diversification Opportunities for Oakmark Global and Dodge Cox
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oakmark and Dodge is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Global Select and Dodge Global Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Global Stock and Oakmark Global 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 Oakmark Global Select 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 Global Stock has no effect on the direction of Oakmark Global i.e., Oakmark Global and Dodge Cox go up and down completely randomly.
Pair Corralation between Oakmark Global and Dodge Cox
Assuming the 90 days horizon Oakmark Global Select is expected to generate 0.97 times more return on investment than Dodge Cox. However, Oakmark Global Select is 1.03 times less risky than Dodge Cox. It trades about 0.06 of its potential returns per unit of risk. Dodge Global Stock is currently generating about 0.05 per unit of risk. If you would invest 1,796 in Oakmark Global Select on September 4, 2024 and sell it today you would earn a total of 502.00 from holding Oakmark Global Select or generate 27.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Global Select vs. Dodge Global Stock
Performance |
| Timeline |
| Oakmark Global Select |
| Dodge Global Stock |
Oakmark Global and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Global and Dodge Cox
The main advantage of trading using opposite Oakmark Global and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Global 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.| Oakmark Global vs. Gmo High Yield | Oakmark Global vs. Ppm High Yield | Oakmark Global vs. Fidelity Capital Income | Oakmark Global vs. Pioneer High Yield |
| Dodge Cox vs. Ambrus Core Bond | Dodge Cox vs. Versatile Bond Portfolio | Dodge Cox vs. Ultra Short Fixed Income | Dodge Cox vs. Multisector Bond Sma |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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