Correlation Between Stewart Global and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Stewart 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 Stewart 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 Stewart Global Equity and Dodge Global Stock, you can compare the effects of market volatilities on Stewart 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 Stewart Global with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Global and Dodge Cox.
Diversification Opportunities for Stewart Global and Dodge Cox
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stewart and Dodge is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Global Equity 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 Stewart 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 Stewart Global Equity 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 Stewart Global i.e., Stewart Global and Dodge Cox go up and down completely randomly.
Pair Corralation between Stewart Global and Dodge Cox
Assuming the 90 days horizon Stewart Global Equity is expected to generate 0.94 times more return on investment than Dodge Cox. However, Stewart Global Equity is 1.07 times less risky than Dodge Cox. It trades about 0.07 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 2,752 in Stewart Global Equity on September 4, 2024 and sell it today you would earn a total of 791.00 from holding Stewart Global Equity or generate 28.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stewart Global Equity vs. Dodge Global Stock
Performance |
| Timeline |
| Stewart Global Equity |
| Dodge Global Stock |
Stewart Global and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Global and Dodge Cox
The main advantage of trading using opposite Stewart Global and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart 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.| Stewart Global vs. Steward Small Mid Cap | Stewart Global vs. Steward Large Cap | Stewart Global vs. Steward International Enhanced | Stewart Global vs. Steward Select Bond |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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