Correlation Between Dynex Capital and Franklin Real
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Franklin 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 Franklin 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 Franklin Real Estate, you can compare the effects of market volatilities on Dynex Capital and Franklin 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 Franklin Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Franklin Real.
Diversification Opportunities for Dynex Capital and Franklin Real
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dynex and Franklin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Franklin Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin 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 Franklin Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Real Estate has no effect on the direction of Dynex Capital i.e., Dynex Capital and Franklin Real go up and down completely randomly.
Pair Corralation between Dynex Capital and Franklin Real
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 0.94 times more return on investment than Franklin Real. However, Dynex Capital is 1.07 times less risky than Franklin Real. It trades about 0.18 of its potential returns per unit of risk. Franklin Real Estate is currently generating about -0.06 per unit of risk. If you would invest 1,237 in Dynex Capital on September 12, 2024 and sell it today you would earn a total of 35.00 from holding Dynex Capital or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dynex Capital vs. Franklin Real Estate
Performance |
| Timeline |
| Dynex Capital |
| Franklin Real Estate |
Dynex Capital and Franklin Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Franklin Real
The main advantage of trading using opposite Dynex Capital and Franklin Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Franklin 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 Franklin Real will offset losses from the drop in Franklin 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 |
| Franklin Real vs. Mfs Technology Fund | Franklin Real vs. Goldman Sachs Technology | Franklin Real vs. Janus Global Technology | Franklin Real vs. Allianzgi Technology Fund |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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