Correlation Between Dodge Cox and Lsv Global
Can any of the company-specific risk be diversified away by investing in both Dodge Cox 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 Cox 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 Cox Global and Lsv Global Value, you can compare the effects of market volatilities on Dodge Cox 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 Cox with a short position of Lsv Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Lsv Global.
Diversification Opportunities for Dodge Cox and Lsv Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Lsv is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Global and Lsv Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Global Value 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 Global 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 Value has no effect on the direction of Dodge Cox i.e., Dodge Cox and Lsv Global go up and down completely randomly.
Pair Corralation between Dodge Cox and Lsv Global
Assuming the 90 days horizon Dodge Cox Global is expected to generate 0.98 times more return on investment than Lsv Global. However, Dodge Cox Global is 1.03 times less risky than Lsv Global. It trades about 0.17 of its potential returns per unit of risk. Lsv Global Value is currently generating about 0.09 per unit of risk. If you would invest 1,370 in Dodge Cox Global on December 28, 2024 and sell it today you would earn a total of 111.00 from holding Dodge Cox Global or generate 8.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dodge Cox Global vs. Lsv Global Value
Performance |
Timeline |
Dodge Cox Global |
Lsv Global Value |
Dodge Cox and Lsv Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dodge Cox and Lsv Global
The main advantage of trading using opposite Dodge Cox and Lsv Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox 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.Dodge Cox vs. Prudential Financial Services | Dodge Cox vs. Mesirow Financial Small | Dodge Cox vs. Goldman Sachs Financial | Dodge Cox vs. Fidelity Advisor Financial |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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