Correlation Between Kennedy Wilson and Dynex Capital
Can any of the company-specific risk be diversified away by investing in both Kennedy Wilson and Dynex 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 Kennedy Wilson and Dynex Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kennedy Wilson Holdings and Dynex Capital, you can compare the effects of market volatilities on Kennedy Wilson and Dynex 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 Kennedy Wilson with a short position of Dynex Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kennedy Wilson and Dynex Capital.
Diversification Opportunities for Kennedy Wilson and Dynex Capital
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kennedy and Dynex is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital and Kennedy Wilson 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 Kennedy Wilson Holdings are associated (or correlated) with Dynex Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynex Capital has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Dynex Capital go up and down completely randomly.
Pair Corralation between Kennedy Wilson and Dynex Capital
Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 2.64 times more return on investment than Dynex Capital. However, Kennedy Wilson is 2.64 times more volatile than Dynex Capital. It trades about 0.07 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.07 per unit of risk. If you would invest 1,113 in Kennedy Wilson Holdings on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Kennedy Wilson Holdings or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kennedy Wilson Holdings vs. Dynex Capital
Performance |
| Timeline |
| Kennedy Wilson Holdings |
| Dynex Capital |
Kennedy Wilson and Dynex Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kennedy Wilson and Dynex Capital
The main advantage of trading using opposite Kennedy Wilson and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kennedy Wilson position performs unexpectedly, Dynex 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 Dynex Capital will offset losses from the drop in Dynex Capital's long position.The idea behind Kennedy Wilson Holdings and Dynex Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dynex Capital vs. Ellington Residential Mortgage | Dynex Capital vs. Orchid Island Capital | Dynex Capital vs. ARMOUR Residential REIT | Dynex Capital vs. Ellington Financial |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |