Correlation Between Dodge Stock and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both Dodge Stock and Aristotle Funds 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 Stock and Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Stock Fund and Aristotle Funds Series, you can compare the effects of market volatilities on Dodge Stock and Aristotle Funds 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 Stock with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Stock and Aristotle Funds.
Diversification Opportunities for Dodge Stock and Aristotle Funds
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dodge and Aristotle is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Stock Fund and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and Dodge Stock 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 Stock Fund are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Dodge Stock i.e., Dodge Stock and Aristotle Funds go up and down completely randomly.
Pair Corralation between Dodge Stock and Aristotle Funds
Assuming the 90 days horizon Dodge Stock Fund is expected to generate 0.83 times more return on investment than Aristotle Funds. However, Dodge Stock Fund is 1.21 times less risky than Aristotle Funds. It trades about -0.3 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about -0.38 per unit of risk. If you would invest 28,650 in Dodge Stock Fund on September 25, 2024 and sell it today you would lose (2,767) from holding Dodge Stock Fund or give up 9.66% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dodge Stock Fund vs. Aristotle Funds Series
Performance |
Timeline |
Dodge Stock Fund |
Aristotle Funds Series |
Dodge Stock and Aristotle Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dodge Stock and Aristotle Funds
The main advantage of trading using opposite Dodge Stock and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Stock position performs unexpectedly, Aristotle Funds 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.Dodge Stock vs. Dodge International Stock | Dodge Stock vs. Dodge Balanced Fund | Dodge Stock vs. Dodge Income Fund | Dodge Stock vs. Total Return Fund |
Aristotle Funds vs. Artisan Small Cap | Aristotle Funds vs. Df Dent Small | Aristotle Funds vs. Guidemark Smallmid Cap | Aristotle Funds vs. Champlain Small |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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