Correlation Between Blackstone and Dynex Capital
Can any of the company-specific risk be diversified away by investing in both Blackstone 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 Blackstone and Dynex Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Dynex Capital, you can compare the effects of market volatilities on Blackstone 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 Blackstone with a short position of Dynex Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Dynex Capital.
Diversification Opportunities for Blackstone and Dynex Capital
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Blackstone and Dynex is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital and Blackstone 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 Blackstone 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 Blackstone i.e., Blackstone and Dynex Capital go up and down completely randomly.
Pair Corralation between Blackstone and Dynex Capital
Allowing for the 90-day total investment horizon Blackstone is expected to generate 3.72 times less return on investment than Dynex Capital. In addition to that, Blackstone is 2.18 times more volatile than Dynex Capital. It trades about 0.04 of its total potential returns per unit of risk. Dynex Capital is currently generating about 0.35 per unit of volatility. If you would invest 1,245 in Dynex Capital on November 5, 2024 and sell it today you would earn a total of 82.00 from holding Dynex Capital or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Dynex Capital
Performance |
| Timeline |
| Blackstone Group |
| Dynex Capital |
Blackstone and Dynex Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Dynex Capital
The main advantage of trading using opposite Blackstone and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone 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.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Dynex Capital vs. Ellington Residential Mortgage | Dynex Capital vs. Orchid Island Capital | Dynex Capital vs. ARMOUR Residential REIT | Dynex Capital vs. Ellington Financial |
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.
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