Correlation Between Dynex Capital and Vanguard Reit
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Vanguard Reit 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 Vanguard Reit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Vanguard Reit Index, you can compare the effects of market volatilities on Dynex Capital and Vanguard Reit 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 Vanguard Reit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Vanguard Reit.
Diversification Opportunities for Dynex Capital and Vanguard Reit
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dynex and Vanguard is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Vanguard Reit Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Reit Index 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 Vanguard Reit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Reit Index has no effect on the direction of Dynex Capital i.e., Dynex Capital and Vanguard Reit go up and down completely randomly.
Pair Corralation between Dynex Capital and Vanguard Reit
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 0.91 times more return on investment than Vanguard Reit. However, Dynex Capital is 1.1 times less risky than Vanguard Reit. It trades about 0.18 of its potential returns per unit of risk. Vanguard Reit Index is currently generating about -0.06 per unit of risk. If you would invest 1,237 in Dynex Capital on September 12, 2024 and sell it today you would earn a total of 35.00 from holding Dynex Capital or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dynex Capital vs. Vanguard Reit Index
Performance |
| Timeline |
| Dynex Capital |
| Vanguard Reit Index |
Dynex Capital and Vanguard Reit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Vanguard Reit
The main advantage of trading using opposite Dynex Capital and Vanguard Reit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Vanguard Reit 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 Vanguard Reit will offset losses from the drop in Vanguard Reit'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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