Correlation Between Dynex Capital and Columbia Real
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Columbia Real 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 Columbia Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Columbia Real Estate, you can compare the effects of market volatilities on Dynex Capital and Columbia Real 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 Columbia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Columbia Real.
Diversification Opportunities for Dynex Capital and Columbia Real
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dynex and Columbia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Columbia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Real Estate 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 Columbia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Real Estate has no effect on the direction of Dynex Capital i.e., Dynex Capital and Columbia Real go up and down completely randomly.
Pair Corralation between Dynex Capital and Columbia Real
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 0.95 times more return on investment than Columbia Real. However, Dynex Capital is 1.06 times less risky than Columbia Real. It trades about 0.23 of its potential returns per unit of risk. Columbia Real Estate is currently generating about 0.22 per unit of risk. If you would invest 1,206 in Dynex Capital on September 1, 2024 and sell it today you would earn a total of 49.00 from holding Dynex Capital or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dynex Capital vs. Columbia Real Estate
Performance |
| Timeline |
| Dynex Capital |
| Columbia Real Estate |
Dynex Capital and Columbia Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Columbia Real
The main advantage of trading using opposite Dynex Capital and Columbia Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Columbia Real 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 Columbia Real will offset losses from the drop in Columbia Real'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 |
| Columbia Real vs. Msif Real Estate | Columbia Real vs. Pender Real Estate | Columbia Real vs. Goldman Sachs Real | Columbia Real vs. Tiaa Cref Real Estate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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