Correlation Between Bird Construction and NexPoint Hospitality
Can any of the company-specific risk be diversified away by investing in both Bird Construction and NexPoint Hospitality 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 Bird Construction and NexPoint Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bird Construction and NexPoint Hospitality Trust, you can compare the effects of market volatilities on Bird Construction and NexPoint Hospitality 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 Bird Construction with a short position of NexPoint Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bird Construction and NexPoint Hospitality.
Diversification Opportunities for Bird Construction and NexPoint Hospitality
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bird and NexPoint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bird Construction and NexPoint Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Hospitality and Bird Construction 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 Bird Construction are associated (or correlated) with NexPoint Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexPoint Hospitality has no effect on the direction of Bird Construction i.e., Bird Construction and NexPoint Hospitality go up and down completely randomly.
Pair Corralation between Bird Construction and NexPoint Hospitality
Assuming the 90 days trading horizon Bird Construction is expected to generate 1708.09 times less return on investment than NexPoint Hospitality. But when comparing it to its historical volatility, Bird Construction is 80.8 times less risky than NexPoint Hospitality. It trades about 0.01 of its potential returns per unit of risk. NexPoint Hospitality Trust is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.50 in NexPoint Hospitality Trust on August 30, 2024 and sell it today you would earn a total of 29.50 from holding NexPoint Hospitality Trust or generate 1966.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bird Construction vs. NexPoint Hospitality Trust
Performance |
| Timeline |
| Bird Construction |
| NexPoint Hospitality |
Bird Construction and NexPoint Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bird Construction and NexPoint Hospitality
The main advantage of trading using opposite Bird Construction and NexPoint Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bird Construction position performs unexpectedly, NexPoint Hospitality 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 Hospitality will offset losses from the drop in NexPoint Hospitality's long position.| Bird Construction vs. Aecon Group | Bird Construction vs. Mullen Group | Bird Construction vs. Wajax | Bird Construction vs. Exchange Income |
| NexPoint Hospitality vs. Bip Investment Corp | NexPoint Hospitality vs. CNJ Capital Investments | NexPoint Hospitality vs. Diversified Royalty Corp | NexPoint Hospitality vs. Economic Investment Trust |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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