Correlation Between Dynex Capital and AllianceBernstein
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and AllianceBernstein 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 Dynex Capital and AllianceBernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and AllianceBernstein Holding LP, you can compare the effects of market volatilities on Dynex Capital and AllianceBernstein 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 Dynex Capital with a short position of AllianceBernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and AllianceBernstein.
Diversification Opportunities for Dynex Capital and AllianceBernstein
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dynex and AllianceBernstein is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein and Dynex 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 Dynex Capital are associated (or correlated) with AllianceBernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianceBernstein has no effect on the direction of Dynex Capital i.e., Dynex Capital and AllianceBernstein go up and down completely randomly.
Pair Corralation between Dynex Capital and AllianceBernstein
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 1.22 times less return on investment than AllianceBernstein. But when comparing it to its historical volatility, Dynex Capital is 1.22 times less risky than AllianceBernstein. It trades about 0.07 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,213 in AllianceBernstein Holding LP on August 26, 2024 and sell it today you would earn a total of 345.00 from holding AllianceBernstein Holding LP or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynex Capital vs. AllianceBernstein Holding LP
Performance |
| Timeline |
| Dynex Capital |
| AllianceBernstein |
Dynex Capital and AllianceBernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and AllianceBernstein
The main advantage of trading using opposite Dynex Capital and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, AllianceBernstein 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 AllianceBernstein will offset losses from the drop in AllianceBernstein's long position.| Dynex Capital vs. Ellington Residential Mortgage | Dynex Capital vs. Orchid Island Capital | Dynex Capital vs. ARMOUR Residential REIT | Dynex Capital vs. Ellington Financial |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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