Correlation Between Dodge Cox and Income Fund
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Income Fund 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 Income Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Income Fund and Income Fund Income, you can compare the effects of market volatilities on Dodge Cox and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Income Fund.
Diversification Opportunities for Dodge Cox and Income Fund
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Income is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Income Fund and Income Fund Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund Income 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 Income Fund are associated (or correlated) with Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund Income has no effect on the direction of Dodge Cox i.e., Dodge Cox and Income Fund go up and down completely randomly.
Pair Corralation between Dodge Cox and Income Fund
Assuming the 90 days horizon Dodge Income Fund is expected to generate 1.08 times more return on investment than Income Fund. However, Dodge Cox is 1.08 times more volatile than Income Fund Income. It trades about 0.18 of its potential returns per unit of risk. Income Fund Income is currently generating about 0.15 per unit of risk. If you would invest 1,237 in Dodge Income Fund on May 27, 2025 and sell it today you would earn a total of 38.00 from holding Dodge Income Fund or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Dodge Income Fund vs. Income Fund Income
Performance |
| Timeline |
| Dodge Income |
| Income Fund Income |
Dodge Cox and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Income Fund
The main advantage of trading using opposite Dodge Cox and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Stock Fund |
| Income Fund vs. Access Flex High | Income Fund vs. Siit High Yield | Income Fund vs. Mesirow Financial High | Income Fund vs. Prudential High Yield |
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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