Correlation Between Dynex Capital and Tortoise Energy

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

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

Diversification Opportunities for Dynex Capital and Tortoise Energy

0.76

Correlation Coefficient

Dynex Capital  Tortoise Energy

Poor diversification

The 3 months correlation between Dynex and Tortoise is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dynex Capital and Tortoise Energy Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise Energy Infr 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 Tortoise Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise Energy Infr has no effect on the direction of Dynex Capital i.e., Dynex Capital and Tortoise Energy go up and down completely randomly.

Pair Corralation between Dynex Capital and Tortoise Energy

Allowing for the 90-day total investment horizon Dynex Capital is expected to generate 1.72 times less return on investment than Tortoise Energy. In addition to that, Dynex Capital is 1.21 times more volatile than Tortoise Energy Infrastructure. It trades about 0.11 of its total potential returns per unit of risk. Tortoise Energy Infrastructure is currently generating about 0.23 per unit of volatility. If you would invest  3,856  in Tortoise Energy Infrastructure on May 5, 2025 and sell it today you would earn a total of  474.00  from holding Tortoise Energy Infrastructure or generate 12.29% return on investment over 90 days.

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

Dynex Capital  vs.  Tortoise Energy Infrastructure

Dynex Capital

Risk-Adjusted Performance

OK

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.

Tortoise Energy Infr

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tortoise Energy Infrastructure are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Tortoise Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dynex Capital and Tortoise Energy

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

The idea behind Dynex Capital and Tortoise Energy Infrastructure 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.