Correlation Between CTO Realty and NexPoint Diversified
Can any of the company-specific risk be diversified away by investing in both CTO Realty and NexPoint Diversified 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 CTO Realty and NexPoint Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTO Realty Growth and NexPoint Diversified Real, you can compare the effects of market volatilities on CTO Realty and NexPoint Diversified 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 CTO Realty with a short position of NexPoint Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and NexPoint Diversified.
Diversification Opportunities for CTO Realty and NexPoint Diversified
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTO and NexPoint is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and NexPoint Diversified Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Diversified Real and CTO Realty 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 CTO Realty Growth are associated (or correlated) with NexPoint Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexPoint Diversified Real has no effect on the direction of CTO Realty i.e., CTO Realty and NexPoint Diversified go up and down completely randomly.
Pair Corralation between CTO Realty and NexPoint Diversified
Considering the 90-day investment horizon CTO Realty is expected to generate 2.79 times less return on investment than NexPoint Diversified. In addition to that, CTO Realty is 1.49 times more volatile than NexPoint Diversified Real. It trades about 0.05 of its total potential returns per unit of risk. NexPoint Diversified Real is currently generating about 0.22 per unit of volatility. If you would invest 1,556 in NexPoint Diversified Real on August 26, 2024 and sell it today you would earn a total of 62.00 from holding NexPoint Diversified Real or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTO Realty Growth vs. NexPoint Diversified Real
Performance |
| Timeline |
| CTO Realty Growth |
| NexPoint Diversified Real |
CTO Realty and NexPoint Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTO Realty and NexPoint Diversified
The main advantage of trading using opposite CTO Realty and NexPoint Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTO Realty position performs unexpectedly, NexPoint Diversified 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 Diversified will offset losses from the drop in NexPoint Diversified's long position.| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
| NexPoint Diversified vs. NexPoint Strategic Opportunities | NexPoint Diversified vs. Prospect Capital | NexPoint Diversified vs. Ready Capital | NexPoint Diversified vs. SiriusPoint |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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