Correlation Between Jpmorgan International and Dodge Cox

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

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

Diversification Opportunities for Jpmorgan International and Dodge Cox

0.93

Correlation Coefficient

Jpmorgan International  Dodge Cox

Almost no diversification

The 3 months correlation between Jpmorgan and Dodge is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan International Value and Dodge Cox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox International and Jpmorgan International 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 Jpmorgan International Value 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 Cox International has no effect on the direction of Jpmorgan International i.e., Jpmorgan International and Dodge Cox go up and down completely randomly.

Pair Corralation between Jpmorgan International and Dodge Cox

Assuming the 90 days horizon Jpmorgan International Value is expected to generate 1.07 times more return on investment than Dodge Cox. However, Jpmorgan International is 1.07 times more volatile than Dodge Cox International. It trades about 0.24 of its potential returns per unit of risk. Dodge Cox International is currently generating about 0.22 per unit of risk. If you would invest  1,301  in Jpmorgan International Value on February 28, 2024 and sell it today you would earn a total of  136.00  from holding Jpmorgan International Value or generate 10.45% return on investment over 90 days.

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

Jpmorgan International Value  vs.  Dodge Cox International

Jpmorgan International

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan International Value are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Jpmorgan International may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Dodge Cox International

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox International are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dodge Cox may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Jpmorgan International and Dodge Cox

The main advantage of trading using opposite Jpmorgan International and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan International 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 Jpmorgan International Value and Dodge Cox International 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.