Correlation Between Dodge Cox and Payden Core
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Payden Core 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 Payden Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Income Fund and Payden E Bond, you can compare the effects of market volatilities on Dodge Cox and Payden Core 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 Payden Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Payden Core.
Diversification Opportunities for Dodge Cox and Payden Core
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dodge and PAYDEN is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Income Fund and Payden E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden E Bond 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 Income Fund are associated (or correlated) with Payden Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden E Bond has no effect on the direction of Dodge Cox i.e., Dodge Cox and Payden Core go up and down completely randomly.
Pair Corralation between Dodge Cox and Payden Core
Assuming the 90 days horizon Dodge Income Fund is expected to generate 1.13 times more return on investment than Payden Core. However, Dodge Cox is 1.13 times more volatile than Payden E Bond. It trades about 0.05 of its potential returns per unit of risk. Payden E Bond is currently generating about 0.04 per unit of risk. If you would invest 1,263 in Dodge Income Fund on December 2, 2024 and sell it today you would earn a total of 12.00 from holding Dodge Income Fund or generate 0.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dodge Income Fund vs. Payden E Bond
Performance |
Timeline |
Dodge Income |
Payden E Bond |
Dodge Cox and Payden Core Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dodge Cox and Payden Core
The main advantage of trading using opposite Dodge Cox and Payden Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Payden Core 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 Payden Core will offset losses from the drop in Payden Core's long position.Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Harbor Bond Fund |
Payden Core vs. Angel Oak Financial | Payden Core vs. Blackrock Financial Institutions | Payden Core vs. Gabelli Global Financial | Payden Core vs. Rmb Mendon Financial |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |