Correlation Between Dynex Capital and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Sterling Capital 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 Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Sterling Capital Stratton, you can compare the effects of market volatilities on Dynex Capital and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Sterling Capital.
Diversification Opportunities for Dynex Capital and Sterling Capital
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dynex and STERLING is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Stratton has no effect on the direction of Dynex Capital i.e., Dynex Capital and Sterling Capital go up and down completely randomly.
Pair Corralation between Dynex Capital and Sterling Capital
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 26.84 times less return on investment than Sterling Capital. In addition to that, Dynex Capital is 1.01 times more volatile than Sterling Capital Stratton. It trades about 0.0 of its total potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.06 per unit of volatility. If you would invest 3,994 in Sterling Capital Stratton on August 30, 2024 and sell it today you would earn a total of 82.00 from holding Sterling Capital Stratton or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynex Capital vs. Sterling Capital Stratton
Performance |
| Timeline |
| Dynex Capital |
| Sterling Capital Stratton |
Dynex Capital and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Sterling Capital
The main advantage of trading using opposite Dynex Capital and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital'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 |
| Sterling Capital vs. Franklin Natural Resources | Sterling Capital vs. HUMANA INC | Sterling Capital vs. Aquagold International | Sterling Capital vs. Barloworld Ltd ADR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |