Correlation Between Harbor International and Dodge Cox

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Can any of the company-specific risk be diversified away by investing in both Harbor 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 Harbor 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 Harbor International Small and Dodge Cox International, you can compare the effects of market volatilities on Harbor 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 Harbor International with a short position of Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor International and Dodge Cox.

Diversification Opportunities for Harbor International and Dodge Cox

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Harbor and Dodge is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Harbor International Small and Dodge Cox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox International and Harbor 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 Harbor International Small 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 International has no effect on the direction of Harbor International i.e., Harbor International and Dodge Cox go up and down completely randomly.

Pair Corralation between Harbor International and Dodge Cox

Assuming the 90 days horizon Harbor International Small is expected to generate 1.13 times more return on investment than Dodge Cox. However, Harbor International is 1.13 times more volatile than Dodge Cox International. It trades about 0.32 of its potential returns per unit of risk. Dodge Cox International is currently generating about 0.31 per unit of risk. If you would invest  1,260  in Harbor International Small on August 31, 2022 and sell it today you would earn a total of  141.00  from holding Harbor International Small or generate 11.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Harbor International Small  vs.  Dodge Cox International

 Performance (%) 
       Timeline  
Harbor International 
Harbor Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Harbor International Small are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harbor International may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Harbor Price Channel

Dodge Cox International 
Dodge Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox International are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Dodge Cox is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dodge Price Channel

Harbor International and Dodge Cox Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Harbor International and Dodge Cox

The main advantage of trading using opposite Harbor International and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor 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.
Harbor International vs. Kopernik Global All-Cap
Harbor International vs. Kopernik Global All-Cap
Harbor International vs. Oakmark International Small
Harbor International vs. Oakmark International Small
The idea behind Harbor International Small and Dodge Cox International 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. Horizon Active Dividend
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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