Correlation Between Dynex Capital and Opendoor Technologies
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Opendoor Technologies 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 Opendoor Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Opendoor Technologies, you can compare the effects of market volatilities on Dynex Capital and Opendoor Technologies 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 Opendoor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Opendoor Technologies.
Diversification Opportunities for Dynex Capital and Opendoor Technologies
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dynex and Opendoor is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Opendoor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opendoor Technologies 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 Opendoor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opendoor Technologies has no effect on the direction of Dynex Capital i.e., Dynex Capital and Opendoor Technologies go up and down completely randomly.
Pair Corralation between Dynex Capital and Opendoor Technologies
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 0.22 times more return on investment than Opendoor Technologies. However, Dynex Capital is 4.45 times less risky than Opendoor Technologies. It trades about 0.52 of its potential returns per unit of risk. Opendoor Technologies is currently generating about -0.01 per unit of risk. If you would invest 1,272 in Dynex Capital on November 30, 2024 and sell it today you would earn a total of 123.00 from holding Dynex Capital or generate 9.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dynex Capital vs. Opendoor Technologies
Performance |
Timeline |
Dynex Capital |
Opendoor Technologies |
Dynex Capital and Opendoor Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dynex Capital and Opendoor Technologies
The main advantage of trading using opposite Dynex Capital and Opendoor Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Opendoor Technologies 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 Opendoor Technologies will offset losses from the drop in Opendoor Technologies' long position.Dynex Capital vs. Ellington Residential Mortgage | ||
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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