Correlation Between CTO Realty and NexPoint Strategic
Can any of the company-specific risk be diversified away by investing in both CTO Realty and NexPoint Strategic 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 Strategic 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 Strategic Opportunities, you can compare the effects of market volatilities on CTO Realty and NexPoint Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and NexPoint Strategic.
Diversification Opportunities for CTO Realty and NexPoint Strategic
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CTO and NexPoint is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and NexPoint Strategic Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Strategic 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 Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexPoint Strategic has no effect on the direction of CTO Realty i.e., CTO Realty and NexPoint Strategic go up and down completely randomly.
Pair Corralation between CTO Realty and NexPoint Strategic
Considering the 90-day investment horizon CTO Realty Growth is expected to generate 0.62 times more return on investment than NexPoint Strategic. However, CTO Realty Growth is 1.61 times less risky than NexPoint Strategic. It trades about -0.02 of its potential returns per unit of risk. NexPoint Strategic Opportunities is currently generating about -0.28 per unit of risk. If you would invest 1,971 in CTO Realty Growth on November 1, 2024 and sell it today you would lose (11.00) from holding CTO Realty Growth or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTO Realty Growth vs. NexPoint Strategic Opportuniti
Performance |
| Timeline |
| CTO Realty Growth |
| NexPoint Strategic |
CTO Realty and NexPoint Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTO Realty and NexPoint Strategic
The main advantage of trading using opposite CTO Realty and NexPoint Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTO Realty position performs unexpectedly, NexPoint Strategic 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 Strategic will offset losses from the drop in NexPoint Strategic'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 Strategic vs. Modiv Inc | NexPoint Strategic vs. Gladstone Commercial Corp | NexPoint Strategic vs. CTO Realty Growth | NexPoint Strategic vs. Broadstone Net Lease |
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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