Correlation Between Brookfield Corp and Dynex Capital

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

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

Diversification Opportunities for Brookfield Corp and Dynex Capital

0.7

Correlation Coefficient

Brookfield Corp  Dynex Capital

Poor diversification

The 3 months correlation between Brookfield and Dynex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital and Brookfield Corp 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 Brookfield Corp 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 Brookfield Corp i.e., Brookfield Corp and Dynex Capital go up and down completely randomly.

Pair Corralation between Brookfield Corp and Dynex Capital

Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 1.51 times more return on investment than Dynex Capital. However, Brookfield Corp is 1.51 times more volatile than Dynex Capital. It trades about 0.2 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.11 per unit of risk. If you would invest  5,581  in Brookfield Corp on May 7, 2025 and sell it today you would earn a total of  1,137  from holding Brookfield Corp or generate 20.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Brookfield Corp  vs.  Dynex Capital

Brookfield Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Brookfield Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Dynex Capital

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Dynex Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Dynex Capital may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Brookfield Corp and Dynex Capital

The main advantage of trading using opposite Brookfield Corp and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Corp 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 Brookfield Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.