Correlation Between SAITECH Global and Dynex Capital

Can any of the company-specific risk be diversified away by investing in both SAITECH Global 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 SAITECH Global and Dynex Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SAITECH Global and Dynex Capital, you can compare the effects of market volatilities on SAITECH Global 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 SAITECH Global with a short position of Dynex Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAITECH Global and Dynex Capital.

Diversification Opportunities for SAITECH Global and Dynex Capital

-0.54

Correlation Coefficient

SAITECH Global  Dynex Capital

Excellent diversification

The 3 months correlation between SAITECH and Dynex is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SAITECH Global and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital and SAITECH Global 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 SAITECH Global 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 SAITECH Global i.e., SAITECH Global and Dynex Capital go up and down completely randomly.

Pair Corralation between SAITECH Global and Dynex Capital

Assuming the 90 days horizon SAITECH Global is expected to generate 16.31 times more return on investment than Dynex Capital. However, SAITECH Global is 16.31 times more volatile than Dynex Capital. It trades about 0.23 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.2 per unit of risk. If you would invest  5.57  in SAITECH Global on March 2, 2024 and sell it today you would earn a total of  1.52  from holding SAITECH Global or generate 27.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	40.91%
Values	Daily Returns

SAITECH Global  vs.  Dynex Capital

SAITECH Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAITECH Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in July 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Dynex Capital

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dynex Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Dynex Capital is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SAITECH Global and Dynex Capital

The main advantage of trading using opposite SAITECH Global and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAITECH Global 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 SAITECH Global 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.