Correlation Between Payden Emerging and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Payden Emerging 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 Payden Emerging and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Emerging Markets and Dodge Cox Emerging, you can compare the effects of market volatilities on Payden Emerging 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 Payden Emerging with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Emerging and Dodge Cox.
Diversification Opportunities for Payden Emerging and Dodge Cox
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Payden and Dodge is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Payden Emerging Markets and Dodge Cox Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Emerging and Payden Emerging 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 Payden Emerging Markets 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 Emerging has no effect on the direction of Payden Emerging i.e., Payden Emerging and Dodge Cox go up and down completely randomly.
Pair Corralation between Payden Emerging and Dodge Cox
Assuming the 90 days horizon Payden Emerging Markets is expected to generate 0.22 times more return on investment than Dodge Cox. However, Payden Emerging Markets is 4.52 times less risky than Dodge Cox. It trades about 0.07 of its potential returns per unit of risk. Dodge Cox Emerging is currently generating about -0.16 per unit of risk. If you would invest 880.00 in Payden Emerging Markets on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Payden Emerging Markets or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Emerging Markets vs. Dodge Cox Emerging
Performance |
| Timeline |
| Payden Emerging Markets |
| Dodge Cox Emerging |
Payden Emerging and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Emerging and Dodge Cox
The main advantage of trading using opposite Payden Emerging and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Emerging 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.| Payden Emerging vs. T Rowe Price | Payden Emerging vs. Oklahoma Municipal Fund | Payden Emerging vs. Ab Impact Municipal | Payden Emerging vs. Maryland Tax Free Bond |
| Dodge Cox vs. Adams Diversified Equity | Dodge Cox vs. Delaware Limited Term Diversified | Dodge Cox vs. Fidelity Advisor Diversified | Dodge Cox vs. American Century Diversified |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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