Correlation Between Dodge Cox and WisdomTree Siegel

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

By analyzing existing cross correlation between Dodge Global Stock and WisdomTree Siegel Global, you can compare the effects of market volatilities on Dodge Cox and WisdomTree Siegel 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 WisdomTree Siegel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and WisdomTree Siegel.

Diversification Opportunities for Dodge Cox and WisdomTree Siegel

0.57

Correlation Coefficient

Dodge Cox  WisdomTree Siegel

Very weak diversification

The 3 months correlation between Dodge and WisdomTree is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and WisdomTree Siegel Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Siegel Global 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 Global Stock are associated (or correlated) with WisdomTree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Siegel Global has no effect on the direction of Dodge Cox i.e., Dodge Cox and WisdomTree Siegel go up and down completely randomly.

Pair Corralation between Dodge Cox and WisdomTree Siegel

If you would invest  1,369  in Dodge Global Stock on December 30, 2024 and sell it today you would earn a total of  90.00  from holding Dodge Global Stock or generate 6.57% return on investment over 90 days.

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

Dodge Global Stock  vs.  WisdomTree Siegel Global

Dodge Global Stock

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Global Stock are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dodge Cox may actually be approaching a critical reversion point that can send shares even higher in April 2025.

WisdomTree Siegel Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days WisdomTree Siegel Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, WisdomTree Siegel 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 WisdomTree Siegel

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

The idea behind Dodge Global Stock and WisdomTree Siegel Global 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.