Correlation Between Dynex Capital and PowerUp Acquisition
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and PowerUp Acquisition 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 PowerUp Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and PowerUp Acquisition Corp, you can compare the effects of market volatilities on Dynex Capital and PowerUp Acquisition 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 PowerUp Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and PowerUp Acquisition.
Diversification Opportunities for Dynex Capital and PowerUp Acquisition
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dynex and PowerUp is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and PowerUp Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerUp Acquisition Corp 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 PowerUp Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerUp Acquisition Corp has no effect on the direction of Dynex Capital i.e., Dynex Capital and PowerUp Acquisition go up and down completely randomly.
Pair Corralation between Dynex Capital and PowerUp Acquisition
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 217.16 times less return on investment than PowerUp Acquisition. But when comparing it to its historical volatility, Dynex Capital is 67.07 times less risky than PowerUp Acquisition. It trades about 0.03 of its potential returns per unit of risk. PowerUp Acquisition Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9.99 in PowerUp Acquisition Corp on September 5, 2024 and sell it today you would lose (7.25) from holding PowerUp Acquisition Corp or give up 72.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.83% |
| Values | Daily Returns |
Dynex Capital vs. PowerUp Acquisition Corp
Performance |
| Timeline |
| Dynex Capital |
| PowerUp Acquisition Corp |
Dynex Capital and PowerUp Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and PowerUp Acquisition
The main advantage of trading using opposite Dynex Capital and PowerUp Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, PowerUp Acquisition 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 PowerUp Acquisition will offset losses from the drop in PowerUp Acquisition'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 |
| PowerUp Acquisition vs. Visa Class A | PowerUp Acquisition vs. Deutsche Bank AG | PowerUp Acquisition vs. Dynex Capital |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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