Correlation Between Dodge Cox and Pimco Extended
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Pimco Extended 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 Pimco Extended 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 Pimco Extended Duration, you can compare the effects of market volatilities on Dodge Cox and Pimco Extended 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 Pimco Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Pimco Extended.
Diversification Opportunities for Dodge Cox and Pimco Extended
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and Pimco is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Pimco Extended Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Extended Duration 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 Pimco Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Extended Duration has no effect on the direction of Dodge Cox i.e., Dodge Cox and Pimco Extended go up and down completely randomly.
Pair Corralation between Dodge Cox and Pimco Extended
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.61 times more return on investment than Pimco Extended. However, Dodge Cox Stock is 1.63 times less risky than Pimco Extended. It trades about 0.01 of its potential returns per unit of risk. Pimco Extended Duration is currently generating about -0.02 per unit of risk. If you would invest 27,182 in Dodge Cox Stock on December 4, 2024 and sell it today you would earn a total of 116.00 from holding Dodge Cox Stock or generate 0.43% 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. Pimco Extended Duration
Performance |
Timeline |
Dodge Cox Stock |
Pimco Extended Duration |
Dodge Cox and Pimco Extended Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dodge Cox and Pimco Extended
The main advantage of trading using opposite Dodge Cox and Pimco Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Pimco Extended 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 Pimco Extended will offset losses from the drop in Pimco Extended's long position.Dodge Cox vs. Dunham Large Cap | Dodge Cox vs. Lord Abbett Affiliated | Dodge Cox vs. Profunds Large Cap Growth | Dodge Cox vs. Jpmorgan Large Cap |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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