Correlation Between Gatos Silver and NexPoint Hospitality
Can any of the company-specific risk be diversified away by investing in both Gatos Silver 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 Gatos Silver and NexPoint Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and NexPoint Hospitality Trust, you can compare the effects of market volatilities on Gatos Silver 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 Gatos Silver with a short position of NexPoint Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and NexPoint Hospitality.
Diversification Opportunities for Gatos Silver and NexPoint Hospitality
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gatos and NexPoint is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and NexPoint Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Hospitality and Gatos Silver 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 Gatos Silver 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 Gatos Silver i.e., Gatos Silver and NexPoint Hospitality go up and down completely randomly.
Pair Corralation between Gatos Silver and NexPoint Hospitality
Assuming the 90 days trading horizon Gatos Silver is expected to under-perform the NexPoint Hospitality. But the stock apears to be less risky and, when comparing its historical volatility, Gatos Silver is 61.36 times less risky than NexPoint Hospitality. The stock trades about -0.23 of its potential returns per unit of risk. The 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 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 | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gatos Silver vs. NexPoint Hospitality Trust
Performance |
| Timeline |
| Gatos Silver |
| NexPoint Hospitality |
Gatos Silver and NexPoint Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and NexPoint Hospitality
The main advantage of trading using opposite Gatos Silver and NexPoint Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver 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.| Gatos Silver vs. First Majestic Silver | Gatos Silver vs. Ivanhoe Energy | Gatos Silver vs. Orezone Gold Corp | Gatos Silver vs. Faraday Copper Corp |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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