Correlation Between Victory Global and Dodge Cox

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

By analyzing existing cross correlation between Victory Global Natural and Dodge Global Stock, you can compare the effects of market volatilities on Victory Global and Dodge Cox 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 Victory Global with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Global and Dodge Cox.

Diversification Opportunities for Victory Global and Dodge Cox

0.47

Correlation Coefficient

Victory Global  Dodge Cox

Very weak diversification

The 3 months correlation between Victory and Dodge is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Victory Global Natural and Dodge Global Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Global Stock and Victory 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 Victory Global Natural are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Global Stock has no effect on the direction of Victory Global i.e., Victory Global and Dodge Cox go up and down completely randomly.

Pair Corralation between Victory Global and Dodge Cox

Assuming the 90 days horizon Victory Global Natural is expected to under-perform the Dodge Cox. But the mutual fund apears to be less risky and, when comparing its historical volatility, Victory Global Natural is 1.32 times less risky than Dodge Cox. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Dodge Global Stock is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  1,622  in Dodge Global Stock on November 28, 2024 and sell it today you would lose (152.00) from holding Dodge Global Stock or give up 9.37% of portfolio value over 90 days.

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

Victory Global Natural  vs.  Dodge Global Stock

Victory Global Natural

Risk-Adjusted Performance

Very Weak

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

Dodge Global Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dodge Global Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Victory Global and Dodge Cox

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

The idea behind Victory Global Natural and Dodge Global Stock 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.