Correlation Between Dodge Cox and Blackrock Commodity

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

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

Diversification Opportunities for Dodge Cox and Blackrock Commodity

0.4

Correlation Coefficient

Dodge Cox  Blackrock Commodity

Very weak diversification

The 3 months correlation between Dodge and Blackrock is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Blackrock Commodity Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Commodity 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 Stock are associated (or correlated) with Blackrock Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Commodity has no effect on the direction of Dodge Cox i.e., Dodge Cox and Blackrock Commodity go up and down completely randomly.

Pair Corralation between Dodge Cox and Blackrock Commodity

Assuming the 90 days horizon Dodge Cox is expected to generate 1.46 times less return on investment than Blackrock Commodity. In addition to that, Dodge Cox is 1.57 times more volatile than Blackrock Commodity Strategies. It trades about 0.26 of its total potential returns per unit of risk. Blackrock Commodity Strategies is currently generating about 0.6 per unit of volatility. If you would invest  830.00  in Blackrock Commodity Strategies on October 25, 2024 and sell it today you would earn a total of  43.00  from holding Blackrock Commodity Strategies or generate 5.18% return on investment over 90 days.

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

Dodge Cox Stock  vs.  Blackrock Commodity Strategies

Dodge Cox Stock

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox Stock are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Dodge Cox is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Commodity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Commodity Strategies has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Blackrock Commodity is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dodge Cox and Blackrock Commodity

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

The idea behind Dodge Cox Stock and Blackrock Commodity Strategies 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.