Correlation Between Dodge Cox and Alger Mid
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Alger Mid 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 Alger Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge International Stock and Alger Mid Cap, you can compare the effects of market volatilities on Dodge Cox and Alger Mid 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 Alger Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Alger Mid.
Diversification Opportunities for Dodge Cox and Alger Mid
Very poor diversification
The 3 months correlation between DODGE and Alger is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Alger Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Mid Cap 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 International Stock are associated (or correlated) with Alger Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Mid Cap has no effect on the direction of Dodge Cox i.e., Dodge Cox and Alger Mid go up and down completely randomly.
Pair Corralation between Dodge Cox and Alger Mid
Assuming the 90 days horizon Dodge Cox is expected to generate 2.1 times less return on investment than Alger Mid. But when comparing it to its historical volatility, Dodge International Stock is 1.45 times less risky than Alger Mid. It trades about 0.14 of its potential returns per unit of risk. Alger Mid Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,120 in Alger Mid Cap on June 9, 2025 and sell it today you would earn a total of 258.00 from holding Alger Mid Cap or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge International Stock vs. Alger Mid Cap
Performance |
| Timeline |
| Dodge International Stock |
| Alger Mid Cap |
Dodge Cox and Alger Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Alger Mid
The main advantage of trading using opposite Dodge Cox and Alger Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Alger Mid 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 Alger Mid will offset losses from the drop in Alger Mid's long position.| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge Cox Emerging | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Global Stock |
| Alger Mid vs. Heartland Value Plus | Alger Mid vs. Valic Company I | Alger Mid vs. Queens Road Small | Alger Mid vs. Vanguard Small Cap Value |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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