Correlation Between Dodge Global and Lsv Global

Can any of the company-specific risk be diversified away by investing in both Dodge Global and Lsv Global 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 Global and Lsv Global 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 Lsv Global Managed, you can compare the effects of market volatilities on Dodge Global and Lsv Global 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 Global with a short position of Lsv Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Global and Lsv Global.

Diversification Opportunities for Dodge Global and Lsv Global

0.52

Correlation Coefficient

Dodge Global  Lsv Global

Very weak diversification

The 3 months correlation between Dodge and Lsv is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Lsv Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Global Managed and Dodge Global 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 Lsv Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Global Managed has no effect on the direction of Dodge Global i.e., Dodge Global and Lsv Global go up and down completely randomly.

Pair Corralation between Dodge Global and Lsv Global

Assuming the 90 days horizon Dodge Global is expected to generate 1.95 times less return on investment than Lsv Global. In addition to that, Dodge Global is 1.31 times more volatile than Lsv Global Managed. It trades about 0.03 of its total potential returns per unit of risk. Lsv Global Managed is currently generating about 0.09 per unit of volatility. If you would invest  1,164  in Lsv Global Managed on September 12, 2024 and sell it today you would earn a total of  30.00  from holding Lsv Global Managed or generate 2.58% 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.  Lsv Global Managed

Dodge Global Stock

Risk-Adjusted Performance

2 of 100

Insignificant

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 Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lsv Global Managed

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Global Managed are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Lsv Global 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 Global and Lsv Global

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

The idea behind Dodge Global Stock and Lsv Global Managed 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.