Correlation Between Dynex Capital and Marblegate Acquisition

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

By analyzing existing cross correlation between Dynex Capital and Marblegate Acquisition Corp, you can compare the effects of market volatilities on Dynex Capital and Marblegate Acquisition 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 Marblegate Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynex Capital and Marblegate Acquisition.

Diversification Opportunities for Dynex Capital and Marblegate Acquisition

0.27

Correlation Coefficient

Dynex Capital  Marblegate Acquisition

Modest diversification

The 3 months correlation between Dynex and Marblegate is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Marblegate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marblegate Acquisition 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 Marblegate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marblegate Acquisition has no effect on the direction of Dynex Capital i.e., Dynex Capital and Marblegate Acquisition go up and down completely randomly.

Pair Corralation between Dynex Capital and Marblegate Acquisition

Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 3.45 times more return on investment than Marblegate Acquisition. However, Dynex Capital is 3.45 times more volatile than Marblegate Acquisition Corp. It trades about 0.04 of its potential returns per unit of risk. Marblegate Acquisition Corp is currently generating about 0.05 per unit of risk. If you would invest  992.00  in Dynex Capital on September 18, 2024 and sell it today you would earn a total of  277.00  from holding Dynex Capital or generate 27.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Dynex Capital  vs.  Marblegate Acquisition Corp

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.

Marblegate Acquisition

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marblegate Acquisition Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Marblegate Acquisition is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Dynex Capital and Marblegate Acquisition

The main advantage of trading using opposite Dynex Capital and Marblegate Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynex Capital position performs unexpectedly, Marblegate Acquisition 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 Marblegate Acquisition will offset losses from the drop in Marblegate Acquisition's long position.

The idea behind Dynex Capital and Marblegate Acquisition Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.