Correlation Between Apollo Commercial and Nexpoint Real
Can any of the company-specific risk be diversified away by investing in both Apollo Commercial 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 Apollo Commercial and Nexpoint Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Commercial Real and Nexpoint Real Estate, you can compare the effects of market volatilities on Apollo Commercial 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 Apollo Commercial with a short position of Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Commercial and Nexpoint Real.
Diversification Opportunities for Apollo Commercial and Nexpoint Real
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apollo and Nexpoint is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Commercial Real 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 Apollo Commercial 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 Apollo Commercial Real 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 Apollo Commercial i.e., Apollo Commercial and Nexpoint Real go up and down completely randomly.
Pair Corralation between Apollo Commercial and Nexpoint Real
Considering the 90-day investment horizon Apollo Commercial Real is expected to generate 0.89 times more return on investment than Nexpoint Real. However, Apollo Commercial Real is 1.12 times less risky than Nexpoint Real. It trades about 0.01 of its potential returns per unit of risk. Nexpoint Real Estate is currently generating about -0.15 per unit of risk. If you would invest 885.00 in Apollo Commercial Real on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Apollo Commercial Real or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Commercial Real vs. Nexpoint Real Estate
Performance |
| Timeline |
| Apollo Commercial Real |
| Nexpoint Real Estate |
Apollo Commercial and Nexpoint Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Commercial and Nexpoint Real
The main advantage of trading using opposite Apollo Commercial and Nexpoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Commercial 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.| Apollo Commercial vs. Ares Commercial Real | Apollo Commercial vs. PennyMac Mortgage Investment | Apollo Commercial vs. Blackstone Mortgage Trust | Apollo Commercial vs. Starwood Property Trust |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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