Correlation Between Faction Investment and NexPoint Hospitality
Can any of the company-specific risk be diversified away by investing in both Faction Investment 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 Faction Investment and NexPoint Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faction Investment Group and NexPoint Hospitality Trust, you can compare the effects of market volatilities on Faction Investment 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 Faction Investment with a short position of NexPoint Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faction Investment and NexPoint Hospitality.
Diversification Opportunities for Faction Investment and NexPoint Hospitality
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Faction and NexPoint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group and NexPoint Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Hospitality and Faction Investment 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 Faction Investment Group 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 Faction Investment i.e., Faction Investment and NexPoint Hospitality go up and down completely randomly.
Pair Corralation between Faction Investment and NexPoint Hospitality
If you would invest 1.50 in NexPoint Hospitality Trust on August 29, 2024 and sell it today you would earn a total of 28.50 from holding NexPoint Hospitality Trust or generate 1900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faction Investment Group vs. NexPoint Hospitality Trust
Performance |
| Timeline |
| Faction Investment |
| NexPoint Hospitality |
Faction Investment and NexPoint Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faction Investment and NexPoint Hospitality
The main advantage of trading using opposite Faction Investment and NexPoint Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faction Investment 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.| Faction Investment vs. NVIDIA CDR | Faction Investment vs. Apple Inc CDR | Faction Investment vs. Microsoft Corp CDR | Faction Investment vs. Amazon CDR |
| NexPoint Hospitality vs. Gatos Silver | NexPoint Hospitality vs. Partners Value Investments | NexPoint Hospitality vs. Capstone Mining Corp | NexPoint Hospitality vs. Faction Investment Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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