Correlation Between IShares Dividend and Dodge Cox

Can any of the company-specific risk be diversified away by investing in both IShares Dividend 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 IShares Dividend and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Dividend and and Dodge Global Stock, you can compare the effects of market volatilities on IShares Dividend 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 IShares Dividend with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Dividend and Dodge Cox.

Diversification Opportunities for IShares Dividend and Dodge Cox

0.34

Correlation Coefficient

IShares Dividend  Dodge Cox

Weak diversification

The 3 months correlation between IShares and Dodge is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dividend and 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 IShares Dividend 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 iShares Dividend and 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 IShares Dividend i.e., IShares Dividend and Dodge Cox go up and down completely randomly.

Pair Corralation between IShares Dividend and Dodge Cox

Given the investment horizon of 90 days iShares Dividend and is expected to generate 1.03 times more return on investment than Dodge Cox. However, IShares Dividend is 1.03 times more volatile than Dodge Global Stock. It trades about 0.18 of its potential returns per unit of risk. Dodge Global Stock is currently generating about 0.03 per unit of risk. If you would invest  4,715  in iShares Dividend and on September 1, 2024 and sell it today you would earn a total of  380.00  from holding iShares Dividend and or generate 8.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

iShares Dividend and  vs.  Dodge Global Stock

iShares Dividend

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Dividend and are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, IShares Dividend may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Dodge Global Stock

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Global Stock are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dodge Cox is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Dividend and Dodge Cox

The main advantage of trading using opposite IShares Dividend and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Dividend 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.

The idea behind iShares Dividend and and Dodge Global Stock pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.