Correlation Between Dodge Cox and Pioneer Strategic

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

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

Diversification Opportunities for Dodge Cox and Pioneer Strategic

0.85

Correlation Coefficient

Dodge Cox  Pioneer Strategic

Very poor diversification

The 3 months correlation between Dodge and Pioneer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Pioneer Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Strategic Income and Dodge Cox 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 Dodge Cox Emerging are associated (or correlated) with Pioneer Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Strategic Income has no effect on the direction of Dodge Cox i.e., Dodge Cox and Pioneer Strategic go up and down completely randomly.

Pair Corralation between Dodge Cox and Pioneer Strategic

Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 2.95 times more return on investment than Pioneer Strategic. However, Dodge Cox is 2.95 times more volatile than Pioneer Strategic Income. It trades about 0.12 of its potential returns per unit of risk. Pioneer Strategic Income is currently generating about 0.17 per unit of risk. If you would invest  871.00  in Dodge Cox Emerging on December 29, 2024 and sell it today you would earn a total of  55.00  from holding Dodge Cox Emerging or generate 6.31% return on investment over 90 days.

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

Dodge Cox Emerging  vs.  Pioneer Strategic Income

Dodge Cox Emerging

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox Emerging are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dodge Cox may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pioneer Strategic Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Strategic Income are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pioneer Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dodge Cox and Pioneer Strategic

The main advantage of trading using opposite Dodge Cox and Pioneer Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Pioneer Strategic 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 Pioneer Strategic will offset losses from the drop in Pioneer Strategic's long position.

The idea behind Dodge Cox Emerging and Pioneer Strategic Income 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.