Correlation Between Dynex Capital and Realty Income
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Realty Income 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 Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Realty Income, you can compare the effects of market volatilities on Dynex Capital and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Realty Income.
Diversification Opportunities for Dynex Capital and Realty Income
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dynex and Realty is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Dynex Capital i.e., Dynex Capital and Realty Income go up and down completely randomly.
Pair Corralation between Dynex Capital and Realty Income
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 0.78 times more return on investment than Realty Income. However, Dynex Capital is 1.28 times less risky than Realty Income. It trades about 0.07 of its potential returns per unit of risk. Realty Income is currently generating about -0.21 per unit of risk. If you would invest 1,226 in Dynex Capital on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Dynex Capital or generate 1.31% 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. Realty Income
Performance |
| Timeline |
| Dynex Capital |
| Realty Income |
Dynex Capital and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Realty Income
The main advantage of trading using opposite Dynex Capital and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income'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 |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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