Correlation Between Dodge Cox and Guidemark(r) Large

Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Guidemark(r) Large 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 Guidemark(r) Large 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 Guidemark Large Cap, you can compare the effects of market volatilities on Dodge Cox and Guidemark(r) Large 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 Guidemark(r) Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Guidemark(r) Large.

Diversification Opportunities for Dodge Cox and Guidemark(r) Large

0.09

Correlation Coefficient

Dodge Cox  Guidemark(r) Large

Significant diversification

The 3 months correlation between Dodge and Guidemark(r) is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Guidemark Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Large Cap 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 Guidemark(r) Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Large Cap has no effect on the direction of Dodge Cox i.e., Dodge Cox and Guidemark(r) Large go up and down completely randomly.

Pair Corralation between Dodge Cox and Guidemark(r) Large

Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.67 times more return on investment than Guidemark(r) Large. However, Dodge Cox Stock is 1.5 times less risky than Guidemark(r) Large. It trades about 0.08 of its potential returns per unit of risk. Guidemark Large Cap is currently generating about -0.14 per unit of risk. If you would invest  25,883  in Dodge Cox Stock on December 22, 2024 and sell it today you would earn a total of  936.00  from holding Dodge Cox Stock or generate 3.62% return on investment over 90 days.

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

Dodge Cox Stock  vs.  Guidemark Large Cap

Dodge Cox Stock

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox Stock 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, Dodge Cox is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidemark Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guidemark Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Dodge Cox and Guidemark(r) Large

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

The idea behind Dodge Cox Stock and Guidemark Large Cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.