Correlation Between Performance Trust and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Performance Trust 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 Performance Trust and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Trust Strategic and Dodge Global Bond, you can compare the effects of market volatilities on Performance Trust 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 Performance Trust with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Trust and Dodge Cox.
Diversification Opportunities for Performance Trust and Dodge Cox
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Performance and Dodge is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Strategic and Dodge Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Global Bond and Performance Trust 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 Performance Trust Strategic 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 Bond has no effect on the direction of Performance Trust i.e., Performance Trust and Dodge Cox go up and down completely randomly.
Pair Corralation between Performance Trust and Dodge Cox
Assuming the 90 days horizon Performance Trust Strategic is expected to generate 0.99 times more return on investment than Dodge Cox. However, Performance Trust Strategic is 1.01 times less risky than Dodge Cox. It trades about -0.05 of its potential returns per unit of risk. Dodge Global Bond is currently generating about -0.09 per unit of risk. If you would invest 1,978 in Performance Trust Strategic on August 26, 2024 and sell it today you would lose (7.00) from holding Performance Trust Strategic or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Trust Strategic vs. Dodge Global Bond
Performance |
| Timeline |
| Performance Trust |
| Dodge Global Bond |
Performance Trust and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Trust and Dodge Cox
The main advantage of trading using opposite Performance Trust and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Trust 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.| Performance Trust vs. Alphacentric Income Opportunities | Performance Trust vs. Performance Trust Municipal | Performance Trust vs. Guggenheim Total Return | Performance Trust vs. Pimco Income Fund |
| Dodge Cox vs. Dodge Global Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Hotchkis Wiley 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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