Correlation Between Dodge Cox and Mainstay Cushing

Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Mainstay Cushing 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 Mainstay Cushing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dodge Cox Stock and Mainstay Cushing Energy, you can compare the effects of market volatilities on Dodge Cox and Mainstay Cushing 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 Mainstay Cushing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Mainstay Cushing.

Diversification Opportunities for Dodge Cox and Mainstay Cushing

0.0

Correlation Coefficient

Dodge Cox  Mainstay Cushing

Pay attention - limited upside

The 3 months correlation between Dodge and Mainstay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Mainstay Cushing Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Cushing Energy 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 Stock are associated (or correlated) with Mainstay Cushing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Cushing Energy has no effect on the direction of Dodge Cox i.e., Dodge Cox and Mainstay Cushing go up and down completely randomly.

Pair Corralation between Dodge Cox and Mainstay Cushing

If you would invest  26,978  in Dodge Cox Stock on August 31, 2024 and sell it today you would earn a total of  1,757  from holding Dodge Cox Stock or generate 6.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dodge Cox Stock  vs.  Mainstay Cushing Energy

Dodge Cox Stock

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox Stock are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dodge Cox may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Mainstay Cushing Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Cushing Energy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Mainstay Cushing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dodge Cox and Mainstay Cushing

The main advantage of trading using opposite Dodge Cox and Mainstay Cushing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Mainstay Cushing 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 Mainstay Cushing will offset losses from the drop in Mainstay Cushing's long position.

The idea behind Dodge Cox Stock and Mainstay Cushing Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.