Correlation Between Dynex Capital and Globalink Investment

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

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

Diversification Opportunities for Dynex Capital and Globalink Investment

0.35

Correlation Coefficient

Dynex Capital  Globalink Investment

Weak diversification

The 3 months correlation between Dynex and Globalink is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Globalink Investment Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalink Investment Unit 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 Globalink Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalink Investment Unit has no effect on the direction of Dynex Capital i.e., Dynex Capital and Globalink Investment go up and down completely randomly.

Pair Corralation between Dynex Capital and Globalink Investment

Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 1.53 times less return on investment than Globalink Investment. But when comparing it to its historical volatility, Dynex Capital is 1.48 times less risky than Globalink Investment. It trades about 0.17 of its potential returns per unit of risk. Globalink Investment Unit is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,159  in Globalink Investment Unit on September 18, 2024 and sell it today you would earn a total of  33.00  from holding Globalink Investment Unit or generate 2.85% 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.  Globalink Investment Unit

Dynex Capital

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dynex Capital are ranked lower than 2 (%) 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.

Globalink Investment Unit

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Globalink Investment Unit are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Globalink Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dynex Capital and Globalink Investment

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

The idea behind Dynex Capital and Globalink Investment Unit 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.