Correlation Between Dodge Cox and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Prudential Emerging 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 Prudential Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Cox Emerging and Prudential Emerging Markets, you can compare the effects of market volatilities on Dodge Cox and Prudential Emerging 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 Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Prudential Emerging.
Diversification Opportunities for Dodge Cox and Prudential Emerging
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and Prudential is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging 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 Emerging are associated (or correlated) with Prudential Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Emerging has no effect on the direction of Dodge Cox i.e., Dodge Cox and Prudential Emerging go up and down completely randomly.
Pair Corralation between Dodge Cox and Prudential Emerging
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 1.68 times more return on investment than Prudential Emerging. However, Dodge Cox is 1.68 times more volatile than Prudential Emerging Markets. It trades about 0.27 of its potential returns per unit of risk. Prudential Emerging Markets is currently generating about 0.15 per unit of risk. If you would invest 975.00 in Dodge Cox Emerging on June 4, 2025 and sell it today you would earn a total of 108.00 from holding Dodge Cox Emerging or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Emerging vs. Prudential Emerging Markets
Performance |
| Timeline |
| Dodge Cox Emerging |
| Prudential Emerging |
Dodge Cox and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Prudential Emerging
The main advantage of trading using opposite Dodge Cox and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Prudential Emerging 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 Prudential Emerging will offset losses from the drop in Prudential Emerging's long position.| Dodge Cox vs. Embark Commodity Strategy | Dodge Cox vs. Rbc Emerging Markets | Dodge Cox vs. Calvert Emerging Markets | Dodge Cox vs. Wasatch Frontier Emerging |
| Prudential Emerging vs. Financial Services Portfolio | Prudential Emerging vs. Mesirow Financial Small | Prudential Emerging vs. Mesirow Financial High | Prudential Emerging vs. Angel Oak Financial |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |