Correlation Between Dodge Cox and Pace International
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Pace International 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 Pace International 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 Pace International Emerging, you can compare the effects of market volatilities on Dodge Cox and Pace International 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 Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Pace International.
Diversification Opportunities for Dodge Cox and Pace International
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dodge and Pace is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Pace International Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International 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 Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International has no effect on the direction of Dodge Cox i.e., Dodge Cox and Pace International go up and down completely randomly.
Pair Corralation between Dodge Cox and Pace International
Assuming the 90 days horizon Dodge Cox is expected to generate 1.27 times less return on investment than Pace International. In addition to that, Dodge Cox is 1.0 times more volatile than Pace International Emerging. It trades about 0.29 of its total potential returns per unit of risk. Pace International Emerging is currently generating about 0.37 per unit of volatility. If you would invest 1,343 in Pace International Emerging on April 24, 2025 and sell it today you would earn a total of 199.00 from holding Pace International Emerging or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Global Stock vs. Pace International Emerging
Performance |
| Timeline |
| Dodge Global Stock |
| Pace International |
Dodge Cox and Pace International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Pace International
The main advantage of trading using opposite Dodge Cox and Pace International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Pace International 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 Pace International will offset losses from the drop in Pace International's long position.| Dodge Cox vs. Putnam Global Financials | Dodge Cox vs. 1919 Financial Services | Dodge Cox vs. Vanguard Financials Index | Dodge Cox vs. Goldman Sachs Financial |
| Pace International vs. Rbc Emerging Markets | Pace International vs. Investec Emerging Markets | Pace International vs. Franklin Emerging Market | Pace International vs. Black Oak Emerging |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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