Correlation Between Dynex Capital and Guggenheim Taxable
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Guggenheim Taxable 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 Guggenheim Taxable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Guggenheim Taxable Municipal, you can compare the effects of market volatilities on Dynex Capital and Guggenheim Taxable 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 Guggenheim Taxable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Guggenheim Taxable.
Diversification Opportunities for Dynex Capital and Guggenheim Taxable
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dynex and Guggenheim is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Guggenheim Taxable Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Taxable 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 Guggenheim Taxable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Taxable has no effect on the direction of Dynex Capital i.e., Dynex Capital and Guggenheim Taxable go up and down completely randomly.
Pair Corralation between Dynex Capital and Guggenheim Taxable
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 1.17 times more return on investment than Guggenheim Taxable. However, Dynex Capital is 1.17 times more volatile than Guggenheim Taxable Municipal. It trades about 0.2 of its potential returns per unit of risk. Guggenheim Taxable Municipal is currently generating about 0.23 per unit of risk. If you would invest 1,245 in Dynex Capital on November 2, 2024 and sell it today you would earn a total of 41.00 from holding Dynex Capital or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynex Capital vs. Guggenheim Taxable Municipal
Performance |
| Timeline |
| Dynex Capital |
| Guggenheim Taxable |
Dynex Capital and Guggenheim Taxable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Guggenheim Taxable
The main advantage of trading using opposite Dynex Capital and Guggenheim Taxable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Guggenheim Taxable 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 Guggenheim Taxable will offset losses from the drop in Guggenheim Taxable'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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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