Correlation Between Dynex Capital and Ventas
Can any of the company-specific risk be diversified away by investing in both Dynex Capital and Ventas 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 Ventas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynex Capital and Ventas Inc, you can compare the effects of market volatilities on Dynex Capital and Ventas 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 Ventas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Ventas.
Diversification Opportunities for Dynex Capital and Ventas
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dynex and Ventas is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc 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 Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of Dynex Capital i.e., Dynex Capital and Ventas go up and down completely randomly.
Pair Corralation between Dynex Capital and Ventas
Allowing for the 90-day total investment horizon Dynex Capital is expected to under-perform the Ventas. In addition to that, Dynex Capital is 1.07 times more volatile than Ventas Inc. It trades about -0.07 of its total potential returns per unit of risk. Ventas Inc is currently generating about 0.11 per unit of volatility. If you would invest 4,221 in Ventas Inc on January 25, 2024 and sell it today you would earn a total of 135.00 from holding Ventas Inc or generate 3.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dynex Capital vs. Ventas Inc
Performance |
Timeline |
Dynex Capital |
Ventas Inc |
Dynex Capital and Ventas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dynex Capital and Ventas
The main advantage of trading using opposite Dynex Capital and Ventas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Ventas 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 Ventas will offset losses from the drop in Ventas' long position.Dynex Capital vs. Ellington Financial LLC | Dynex Capital vs. Ares Commercial Real | Dynex Capital vs. Cherry Hill Mortgage | Dynex Capital vs. Franklin BSP Realty |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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