Correlation Between Great Ajax and Nexpoint Real
Can any of the company-specific risk be diversified away by investing in both Great Ajax and Nexpoint Real 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 Great Ajax and Nexpoint Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Ajax Corp and Nexpoint Real Estate, you can compare the effects of market volatilities on Great Ajax and Nexpoint Real 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 Great Ajax with a short position of Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Ajax and Nexpoint Real.
Diversification Opportunities for Great Ajax and Nexpoint Real
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Great and Nexpoint is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Great Ajax Corp and Nexpoint Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexpoint Real Estate and Great Ajax 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 Great Ajax Corp are associated (or correlated) with Nexpoint Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexpoint Real Estate has no effect on the direction of Great Ajax i.e., Great Ajax and Nexpoint Real go up and down completely randomly.
Pair Corralation between Great Ajax and Nexpoint Real
Considering the 90-day investment horizon Great Ajax Corp is expected to under-perform the Nexpoint Real. In addition to that, Great Ajax is 1.22 times more volatile than Nexpoint Real Estate. It trades about -0.04 of its total potential returns per unit of risk. Nexpoint Real Estate is currently generating about 0.05 per unit of volatility. If you would invest 1,343 in Nexpoint Real Estate on August 24, 2024 and sell it today you would earn a total of 360.00 from holding Nexpoint Real Estate or generate 26.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Ajax Corp vs. Nexpoint Real Estate
Performance |
| Timeline |
| Great Ajax Corp |
| Nexpoint Real Estate |
Great Ajax and Nexpoint Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Ajax and Nexpoint Real
The main advantage of trading using opposite Great Ajax and Nexpoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Ajax position performs unexpectedly, Nexpoint Real 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 Nexpoint Real will offset losses from the drop in Nexpoint Real's long position.| Great Ajax vs. Ellington Financial | Great Ajax vs. Dynex Capital | Great Ajax vs. Ares Commercial Real | Great Ajax vs. Cherry Hill Mortgage |
| Nexpoint Real vs. Ellington Residential Mortgage | Nexpoint Real vs. Ares Commercial Real | Nexpoint Real vs. TPG RE Finance | Nexpoint Real vs. Ellington Financial |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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