Correlation Between The Hartford and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford International and Dodge International Stock, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Dodge Cox.
Diversification Opportunities for The Hartford and Dodge Cox
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Dodge is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford International and Dodge International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge International Stock and The Hartford 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 The Hartford International 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 International Stock has no effect on the direction of The Hartford i.e., The Hartford and Dodge Cox go up and down completely randomly.
Pair Corralation between The Hartford and Dodge Cox
Assuming the 90 days horizon The Hartford International is expected to under-perform the Dodge Cox. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford International is 1.09 times less risky than Dodge Cox. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Dodge International Stock is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 5,021 in Dodge International Stock on January 24, 2024 and sell it today you would lose (56.00) from holding Dodge International Stock or give up 1.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
The Hartford International vs. Dodge International Stock
Performance |
Timeline |
Hartford Interna |
Dodge International Stock |
The Hartford and Dodge Cox Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with The Hartford and Dodge Cox
The main advantage of trading using opposite The Hartford and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. The Fairholme 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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