Correlation Between Dynex Capital and Global Net
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Global Net 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 Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Global Net Lease, you can compare the effects of market volatilities on Dynex Capital and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Global Net.
Diversification Opportunities for Dynex Capital and Global Net
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dynex and Global is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Dynex Capital i.e., Dynex Capital and Global Net go up and down completely randomly.
Pair Corralation between Dynex Capital and Global Net
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 0.91 times more return on investment than Global Net. However, Dynex Capital is 1.1 times less risky than Global Net. It trades about 0.08 of its potential returns per unit of risk. Global Net Lease is currently generating about 0.07 per unit of risk. If you would invest 1,011 in Dynex Capital on November 5, 2024 and sell it today you would earn a total of 316.00 from holding Dynex Capital or generate 31.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.65% |
| Values | Daily Returns |
Dynex Capital vs. Global Net Lease
Performance |
| Timeline |
| Dynex Capital |
| Global Net Lease |
Dynex Capital and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Global Net
The main advantage of trading using opposite Dynex Capital and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net'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 |
| Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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