Correlation Between Mainstay Epoch and Dodge Cox

By analyzing existing cross correlation between Mainstay Epoch Global and Dodge Cox Global, you can compare the effects of market volatilities on Mainstay Epoch 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 Mainstay Epoch with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Epoch and Dodge Cox.
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Can any of the company-specific risk be diversified away by investing in both Mainstay Epoch 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 Mainstay Epoch and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Mainstay Epoch and Dodge Cox

0.54
  Correlation Coefficient
Mainstay Epoch Global
Dodge Cox Global

Very weak diversification

The 1 month correlation between Mainstay and Dodge is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch Global and Dodge Cox Global in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Global and Mainstay Epoch 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 Mainstay Epoch Global 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 Global has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Dodge Cox go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Dodge Cox

Assuming the 90 days horizon Mainstay Epoch is expected to generate 2.15 times less return on investment than Dodge Cox. But when comparing it to its historical volatility, Mainstay Epoch Global is 1.22 times less risky than Dodge Cox. It trades about 0.02 of its potential returns per unit of risk. Dodge Cox Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,123  in Dodge Cox Global on October 31, 2021 and sell it today you would earn a total of  327.00  from holding Dodge Cox Global or generate 29.12% return on investment over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Mainstay Epoch Global  vs.  Dodge Cox Global

 Performance (%) 
      Timeline 
Mainstay Epoch Global 
Mainstay Performance
0 of 100
Over the last 90 days Mainstay Epoch Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
Dodge Cox Global 
Dodge Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox Global are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dodge Cox is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Epoch and Dodge Cox Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Mainstay Epoch and Dodge Cox

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

Mainstay Epoch Global

Pair trading matchups for Mainstay Epoch

The idea behind Mainstay Epoch Global and Dodge Cox Global 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.

Dodge Cox Global

Pair trading matchups for Dodge Cox

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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