Correlation Between Cardinal Small and Nexpoint Real
Can any of the company-specific risk be diversified away by investing in both Cardinal Small 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 Cardinal Small and Nexpoint Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Small Cap and Nexpoint Real Estate, you can compare the effects of market volatilities on Cardinal Small 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 Cardinal Small with a short position of Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Small and Nexpoint Real.
Diversification Opportunities for Cardinal Small and Nexpoint Real
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cardinal and NexPoint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Small Cap 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 Cardinal Small 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 Cardinal Small Cap 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 Cardinal Small i.e., Cardinal Small and Nexpoint Real go up and down completely randomly.
Pair Corralation between Cardinal Small and Nexpoint Real
Assuming the 90 days horizon Cardinal Small Cap is expected to generate 2.43 times more return on investment than Nexpoint Real. However, Cardinal Small is 2.43 times more volatile than Nexpoint Real Estate. It trades about 0.04 of its potential returns per unit of risk. Nexpoint Real Estate is currently generating about 0.01 per unit of risk. If you would invest 1,343 in Cardinal Small Cap on November 7, 2024 and sell it today you would earn a total of 101.00 from holding Cardinal Small Cap or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Cardinal Small Cap vs. Nexpoint Real Estate
Performance |
| Timeline |
| Cardinal Small Cap |
| Nexpoint Real Estate |
Cardinal Small and Nexpoint Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Small and Nexpoint Real
The main advantage of trading using opposite Cardinal Small and Nexpoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Small 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.| Cardinal Small vs. Rbc International Small | Cardinal Small vs. Praxis Small Cap | Cardinal Small vs. Needham Small Cap | Cardinal Small vs. Oklahoma College Savings |
| Nexpoint Real vs. Leader Short Term Bond | Nexpoint Real vs. Siit Ultra Short | Nexpoint Real vs. Fidelity Flex Servative | Nexpoint Real vs. Oakhurst Short Duration |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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