Correlation Between Oppenheimer International and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Oppenheimer International and Dodge Cox 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 Oppenheimer International and Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer International Diversified and Dodge Cox Emerging, you can compare the effects of market volatilities on Oppenheimer International and Dodge Cox 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 Oppenheimer International with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and Dodge Cox.
Diversification Opportunities for Oppenheimer International and Dodge Cox
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oppenheimer and Dodge is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Dive and Dodge Cox Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Emerging and Oppenheimer International 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 Oppenheimer International Diversified are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Emerging has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Dodge Cox go up and down completely randomly.
Pair Corralation between Oppenheimer International and Dodge Cox
Assuming the 90 days horizon Oppenheimer International Diversified is expected to under-perform the Dodge Cox. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oppenheimer International Diversified is 1.16 times less risky than Dodge Cox. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Dodge Cox Emerging is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 896.00 in Dodge Cox Emerging on September 17, 2024 and sell it today you would earn a total of 18.00 from holding Dodge Cox Emerging or generate 2.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Oppenheimer International Dive vs. Dodge Cox Emerging
Performance |
Timeline |
Oppenheimer International |
Dodge Cox Emerging |
Oppenheimer International and Dodge Cox Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oppenheimer International and Dodge Cox
The main advantage of trading using opposite Oppenheimer International and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer International position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.The idea behind Oppenheimer International Diversified and Dodge Cox Emerging 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.
Dodge Cox vs. Oppenheimer International Diversified | Dodge Cox vs. Adams Diversified Equity | Dodge Cox vs. Pgim Jennison Diversified | Dodge Cox vs. Fidelity Advisor Diversified |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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