Correlation Between Dodge Cox and State Street
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and State Street 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 State Street 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 State Street Institutional, you can compare the effects of market volatilities on Dodge Cox and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and State Street.
Diversification Opportunities for Dodge Cox and State Street
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dodge and State is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Emerging and State Street Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Institu 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Institu has no effect on the direction of Dodge Cox i.e., Dodge Cox and State Street go up and down completely randomly.
Pair Corralation between Dodge Cox and State Street
Assuming the 90 days horizon Dodge Cox Emerging is expected to generate 0.7 times more return on investment than State Street. However, Dodge Cox Emerging is 1.43 times less risky than State Street. It trades about 0.19 of its potential returns per unit of risk. State Street Institutional is currently generating about -0.01 per unit of risk. If you would invest 1,082 in Dodge Cox Emerging on September 3, 2025 and sell it today you would earn a total of 103.00 from holding Dodge Cox Emerging or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Emerging vs. State Street Institutional
Performance |
| Timeline |
| Dodge Cox Emerging |
| State Street Institu |
Dodge Cox and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and State Street
The main advantage of trading using opposite Dodge Cox and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Dodge Cox vs. Angel Oak Financial | Dodge Cox vs. Davis Financial Fund | Dodge Cox vs. Blackrock Financial Institutions | Dodge Cox vs. John Hancock Financial |
| State Street vs. Dodge Cox Emerging | State Street vs. Pace International Emerging | State Street vs. Franklin Emerging Market | State Street vs. Ashmore Emerging Markets |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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