Correlation Between Dodge Cox and MicroAlgo

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

Diversification Opportunities for Dodge Cox and MicroAlgo

-0.78

Correlation Coefficient

Dodge Cox  MicroAlgo

Pay attention - limited upside

The 3 months correlation between Dodge and MicroAlgo is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of Dodge Cox i.e., Dodge Cox and MicroAlgo go up and down completely randomly.

Pair Corralation between Dodge Cox and MicroAlgo

Assuming the 90 days horizon Dodge Global Stock is expected to generate 0.06 times more return on investment than MicroAlgo. However, Dodge Global Stock is 17.8 times less risky than MicroAlgo. It trades about 0.11 of its potential returns per unit of risk. MicroAlgo is currently generating about -0.27 per unit of risk. If you would invest  1,502  in Dodge Global Stock on May 11, 2025 and sell it today you would earn a total of  66.00  from holding Dodge Global Stock or generate 4.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Dodge Global Stock  vs.  MicroAlgo

Dodge Global Stock

Risk-Adjusted Performance

Fair

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

MicroAlgo

Risk-Adjusted Performance

Weakest

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dodge Cox and MicroAlgo

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

The idea behind Dodge Global Stock and MicroAlgo 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.