Correlation Between Associated Capital and Dynex Capital
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Dynex Capital 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 Associated Capital and Dynex Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Dynex Capital, you can compare the effects of market volatilities on Associated Capital and Dynex Capital 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 Associated Capital with a short position of Dynex Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Dynex Capital.
Diversification Opportunities for Associated Capital and Dynex Capital
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Dynex is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital and Associated Capital 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 Associated Capital Group are associated (or correlated) with Dynex Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynex Capital has no effect on the direction of Associated Capital i.e., Associated Capital and Dynex Capital go up and down completely randomly.
Pair Corralation between Associated Capital and Dynex Capital
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 1.97 times more return on investment than Dynex Capital. However, Associated Capital is 1.97 times more volatile than Dynex Capital. It trades about 0.06 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.1 per unit of risk. If you would invest 3,199 in Associated Capital Group on October 26, 2024 and sell it today you would earn a total of 395.00 from holding Associated Capital Group or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Associated Capital Group vs. Dynex Capital
Performance |
| Timeline |
| Associated Capital |
| Dynex Capital |
Associated Capital and Dynex Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Dynex Capital
The main advantage of trading using opposite Associated Capital and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Dynex Capital 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 Dynex Capital will offset losses from the drop in Dynex Capital's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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