Correlation Between Dodge Cox and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Emerging Markets 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 Emerging Markets 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 Emerging Markets Portfolio, you can compare the effects of market volatilities on Dodge Cox and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Emerging Markets.
Diversification Opportunities for Dodge Cox and Emerging Markets
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and EMERGING is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Dodge Cox i.e., Dodge Cox and Emerging Markets go up and down completely randomly.
Pair Corralation between Dodge Cox and Emerging Markets
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 0.88 times more return on investment than Emerging Markets. However, Dodge Cox Emerging is 1.14 times less risky than Emerging Markets. It trades about 0.25 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.12 per unit of risk. If you would invest 991.00 in Dodge Cox Emerging on June 9, 2025 and sell it today you would earn a total of 100.00 from holding Dodge Cox Emerging or generate 10.09% 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. Emerging Markets Portfolio
Performance |
| Timeline |
| Dodge Cox Emerging |
| Emerging Markets Por |
Dodge Cox and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Emerging Markets
The main advantage of trading using opposite Dodge Cox and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Dodge Cox vs. Pace International Emerging | Dodge Cox vs. Shelton Emerging Markets | Dodge Cox vs. Jpmorgan Emerging Markets | Dodge Cox vs. Payden Emerging Markets |
| Emerging Markets vs. Ab Bond Inflation | Emerging Markets vs. Ab Municipal Bond | Emerging Markets vs. Short Duration Inflation | Emerging Markets vs. Great West Inflation Protected Securities |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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