Correlation Between Dodge Cox and Defensive Market
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Defensive Market 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 Defensive Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Global Stock and Defensive Market Strategies, you can compare the effects of market volatilities on Dodge Cox and Defensive Market 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 Defensive Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Defensive Market.
Diversification Opportunities for Dodge Cox and Defensive Market
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dodge and Defensive is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Defensive Market Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defensive Market Str 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 Global Stock are associated (or correlated) with Defensive Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defensive Market Str has no effect on the direction of Dodge Cox i.e., Dodge Cox and Defensive Market go up and down completely randomly.
Pair Corralation between Dodge Cox and Defensive Market
Assuming the 90 days horizon Dodge Global Stock is expected to generate 1.67 times more return on investment than Defensive Market. However, Dodge Cox is 1.67 times more volatile than Defensive Market Strategies. It trades about 0.23 of its potential returns per unit of risk. Defensive Market Strategies is currently generating about 0.31 per unit of risk. If you would invest 1,446 in Dodge Global Stock on May 1, 2025 and sell it today you would earn a total of 134.00 from holding Dodge Global Stock or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Global Stock vs. Defensive Market Strategies
Performance |
| Timeline |
| Dodge Global Stock |
| Defensive Market Str |
Dodge Cox and Defensive Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Defensive Market
The main advantage of trading using opposite Dodge Cox and Defensive Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Defensive Market 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 Defensive Market will offset losses from the drop in Defensive Market's long position.| Dodge Cox vs. Eventide Healthcare Life | Dodge Cox vs. Highland Longshort Healthcare | Dodge Cox vs. The Hartford Healthcare | Dodge Cox vs. Health Care Ultrasector |
| Defensive Market vs. Thrivent Diversified Income | Defensive Market vs. Tiaa Cref Lifestyle Conservative | Defensive Market vs. Victory Diversified Stock | Defensive Market vs. American Funds Conservative |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |