Correlation Between Teton Westwood and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Teton Westwood 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 Teton Westwood and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teton Westwood Equity and Dodge Cox Stock, you can compare the effects of market volatilities on Teton Westwood 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 Teton Westwood with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teton Westwood and Dodge Cox.
Diversification Opportunities for Teton Westwood and Dodge Cox
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teton and Dodge is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Teton Westwood Equity 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 Teton Westwood 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 Teton Westwood 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 Cox Stock has no effect on the direction of Teton Westwood i.e., Teton Westwood and Dodge Cox go up and down completely randomly.
Pair Corralation between Teton Westwood and Dodge Cox
Assuming the 90 days horizon Teton Westwood Equity is expected to under-perform the Dodge Cox. In addition to that, Teton Westwood is 2.15 times more volatile than Dodge Cox Stock. It trades about -0.05 of its total potential returns per unit of risk. Dodge Cox Stock is currently generating about 0.28 per unit of volatility. If you would invest 27,361 in Dodge Cox Stock on September 1, 2024 and sell it today you would earn a total of 1,444 from holding Dodge Cox Stock or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Teton Westwood Equity vs. Dodge Cox Stock
Performance |
| Timeline |
| Teton Westwood Equity |
| Dodge Cox Stock |
Teton Westwood and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teton Westwood and Dodge Cox
The main advantage of trading using opposite Teton Westwood and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teton Westwood 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.| Teton Westwood vs. Teton Westwood Balanced | Teton Westwood vs. Teton Westwood Small | Teton Westwood vs. The Gabelli Asset | Teton Westwood vs. Teton Westwood Mighty |
| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced Fund |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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