Correlation Between Value Fund and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Value Fund 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 Value Fund and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Fund Value and Dodge Cox Stock, you can compare the effects of market volatilities on Value Fund 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 Value Fund with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Fund and Dodge Cox.
Diversification Opportunities for Value Fund and Dodge Cox
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VALUE and Dodge is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Value Fund Value 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 Value Fund 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 Value Fund Value 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 Value Fund i.e., Value Fund and Dodge Cox go up and down completely randomly.
Pair Corralation between Value Fund and Dodge Cox
Assuming the 90 days horizon Value Fund Value is expected to generate 0.98 times more return on investment than Dodge Cox. However, Value Fund Value is 1.02 times less risky than Dodge Cox. It trades about 0.32 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about 0.29 per unit of risk. If you would invest 2,118 in Value Fund Value on September 4, 2024 and sell it today you would earn a total of 124.00 from holding Value Fund Value or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Value Fund Value vs. Dodge Cox Stock
Performance |
| Timeline |
| Value Fund Value |
| Dodge Cox Stock |
Value Fund and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Fund and Dodge Cox
The main advantage of trading using opposite Value Fund and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Fund 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.| Value Fund vs. Calamos Global Equity | Value Fund vs. Multimedia Portfolio Multimedia | Value Fund vs. Sarofim Equity | Value Fund vs. Cutler Equity |
| Dodge Cox vs. T Rowe Price | Dodge Cox vs. T Rowe Price | Dodge Cox vs. T Rowe Price | Dodge Cox vs. T Rowe Price |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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