Correlation Between NorthView Acquisition and Dynex Capital

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

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

Diversification Opportunities for NorthView Acquisition and Dynex Capital

-0.49

Correlation Coefficient

NorthView Acquisition  Dynex Capital

Very good diversification

The 3 months correlation between NorthView and Dynex is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding NorthView Acquisition and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital and NorthView Acquisition 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 NorthView Acquisition 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 NorthView Acquisition i.e., NorthView Acquisition and Dynex Capital go up and down completely randomly.

Pair Corralation between NorthView Acquisition and Dynex Capital

Assuming the 90 days horizon NorthView Acquisition is expected to generate 257.08 times more return on investment than Dynex Capital. However, NorthView Acquisition is 257.08 times more volatile than Dynex Capital. It trades about 0.22 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.11 per unit of risk. If you would invest  11.00  in NorthView Acquisition on September 29, 2024 and sell it today you would lose (9.70) from holding NorthView Acquisition or give up 88.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	65.87%
Values	Daily Returns

NorthView Acquisition  vs.  Dynex Capital

NorthView Acquisition

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days NorthView Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Dynex Capital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dynex Capital are ranked lower than 1 (%) 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 NorthView Acquisition and Dynex Capital

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

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.