Correlation Between Dodge Cox and Clearbridge Value
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Clearbridge Value 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 Clearbridge Value 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 Clearbridge Value Trust, you can compare the effects of market volatilities on Dodge Cox and Clearbridge Value 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 Clearbridge Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Clearbridge Value.
Diversification Opportunities for Dodge Cox and Clearbridge Value
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and Clearbridge is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Clearbridge Value Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Value Trust 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 Clearbridge Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Value Trust has no effect on the direction of Dodge Cox i.e., Dodge Cox and Clearbridge Value go up and down completely randomly.
Pair Corralation between Dodge Cox and Clearbridge Value
Assuming the 90 days horizon Dodge Cox Stock is expected to generate 0.82 times more return on investment than Clearbridge Value. However, Dodge Cox Stock is 1.22 times less risky than Clearbridge Value. It trades about 0.13 of its potential returns per unit of risk. Clearbridge Value Trust is currently generating about -0.05 per unit of risk. If you would invest 25,228 in Dodge Cox Stock on March 31, 2024 and sell it today you would earn a total of 397.00 from holding Dodge Cox Stock or generate 1.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dodge Cox Stock vs. Clearbridge Value Trust
Performance |
Timeline |
Dodge Cox Stock |
Clearbridge Value Trust |
Dodge Cox and Clearbridge Value Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dodge Cox and Clearbridge Value
The main advantage of trading using opposite Dodge Cox and Clearbridge Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Clearbridge Value 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 Clearbridge Value will offset losses from the drop in Clearbridge Value's long position.Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Global Stock | Dodge Cox vs. Dodge Global Bond | Dodge Cox vs. Dodge Income Fund |
Clearbridge Value vs. Clearbridge Aggressive Growth | Clearbridge Value vs. Clearbridge Small Cap | Clearbridge Value vs. Qs International Equity | Clearbridge Value vs. Clearbridge Appreciation Fund |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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