Correlation Between Dynex Capital and Voya Real
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Voya Real 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 Voya Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Voya Real Estate, you can compare the effects of market volatilities on Dynex Capital and Voya Real 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 Voya Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Voya Real.
Diversification Opportunities for Dynex Capital and Voya Real
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dynex and Voya is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Voya Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Real Estate 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 Voya Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Real Estate has no effect on the direction of Dynex Capital i.e., Dynex Capital and Voya Real go up and down completely randomly.
Pair Corralation between Dynex Capital and Voya Real
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 0.9 times more return on investment than Voya Real. However, Dynex Capital is 1.11 times less risky than Voya Real. It trades about 0.23 of its potential returns per unit of risk. Voya Real Estate is currently generating about 0.15 per unit of risk. If you would invest 1,206 in Dynex Capital on September 1, 2024 and sell it today you would earn a total of 49.00 from holding Dynex Capital or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dynex Capital vs. Voya Real Estate
Performance |
| Timeline |
| Dynex Capital |
| Voya Real Estate |
Dynex Capital and Voya Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynex Capital and Voya Real
The main advantage of trading using opposite Dynex Capital and Voya Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Voya Real 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 Voya Real will offset losses from the drop in Voya Real'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 |
| Voya Real vs. Realty Income | Voya Real vs. Dynex Capital | Voya Real vs. First Industrial Realty | Voya Real vs. Healthcare Realty Trust |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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