Correlation Between American Mutual and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both American Mutual 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 American Mutual and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Dodge Stock Fund, you can compare the effects of market volatilities on American Mutual 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 American Mutual with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Dodge Cox.
Diversification Opportunities for American Mutual and Dodge Cox
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Dodge is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Dodge Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Stock Fund and American Mutual 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 American Mutual Fund 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 Stock Fund has no effect on the direction of American Mutual i.e., American Mutual and Dodge Cox go up and down completely randomly.
Pair Corralation between American Mutual and Dodge Cox
Assuming the 90 days horizon American Mutual is expected to generate 1.28 times less return on investment than Dodge Cox. But when comparing it to its historical volatility, American Mutual Fund is 1.36 times less risky than Dodge Cox. It trades about 0.18 of its potential returns per unit of risk. Dodge Stock Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 21,061 in Dodge Stock Fund on January 18, 2024 and sell it today you would earn a total of 3,601 from holding Dodge Stock Fund or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Dodge Stock Fund
Performance |
| Timeline |
| American Mutual |
| Dodge Stock Fund |
American Mutual and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Dodge Cox
The main advantage of trading using opposite American Mutual and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual 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.| American Mutual vs. Income Fund Of | American Mutual vs. New World Fund | American Mutual vs. American Funds Income | American Mutual vs. American Funds Preservation |
| Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Global Stock |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |