Correlation Between Dynex Capital and Fidelity Real
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Fidelity 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 Fidelity 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 Fidelity Real Estate, you can compare the effects of market volatilities on Dynex Capital and Fidelity 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 Fidelity Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Fidelity Real.
Diversification Opportunities for Dynex Capital and Fidelity Real
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dynex and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Fidelity Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity 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 Fidelity Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Real Estate has no effect on the direction of Dynex Capital i.e., Dynex Capital and Fidelity Real go up and down completely randomly.
Pair Corralation between Dynex Capital and Fidelity Real
Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 1.26 times more return on investment than Fidelity Real. However, Dynex Capital is 1.26 times more volatile than Fidelity Real Estate. It trades about -0.04 of its potential returns per unit of risk. Fidelity Real Estate is currently generating about -0.14 per unit of risk. If you would invest 1,200 in Dynex Capital on February 1, 2024 and sell it today you would lose (33.00) from holding Dynex Capital or give up 2.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dynex Capital vs. Fidelity Real Estate
Performance |
Timeline |
Dynex Capital |
Fidelity Real Estate |
Dynex Capital and Fidelity Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dynex Capital and Fidelity Real
The main advantage of trading using opposite Dynex Capital and Fidelity Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Fidelity 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 Fidelity Real will offset losses from the drop in Fidelity 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 LLC |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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