Correlation Between Dynex Capital and Artisan Partners
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Artisan Partners 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 Artisan Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Artisan Partners Asset, you can compare the effects of market volatilities on Dynex Capital and Artisan Partners 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 Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Artisan Partners.
Diversification Opportunities for Dynex Capital and Artisan Partners
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dynex and Artisan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset 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 Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Dynex Capital i.e., Dynex Capital and Artisan Partners go up and down completely randomly.
Pair Corralation between Dynex Capital and Artisan Partners
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 2.43 times less return on investment than Artisan Partners. But when comparing it to its historical volatility, Dynex Capital is 1.19 times less risky than Artisan Partners. It trades about 0.04 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,658 in Artisan Partners Asset on September 13, 2024 and sell it today you would earn a total of 2,156 from holding Artisan Partners Asset or generate 81.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynex Capital vs. Artisan Partners Asset
Performance |
| Timeline |
| Dynex Capital |
| Artisan Partners Asset |
Dynex Capital and Artisan Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Artisan Partners
The main advantage of trading using opposite Dynex Capital and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Artisan Partners 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 Artisan Partners will offset losses from the drop in Artisan Partners' 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 |
| Artisan Partners vs. Visa Class A | Artisan Partners vs. Diamond Hill Investment | Artisan Partners vs. Distoken Acquisition | Artisan Partners vs. AllianceBernstein Holding LP |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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