Correlation Between KKR Real and Nexpoint Real
Can any of the company-specific risk be diversified away by investing in both KKR Real 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 KKR Real and Nexpoint Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KKR Real Estate and Nexpoint Real Estate, you can compare the effects of market volatilities on KKR Real 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 KKR Real with a short position of Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of KKR Real and Nexpoint Real.
Diversification Opportunities for KKR Real and Nexpoint Real
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between KKR and Nexpoint is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KKR Real Estate 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 KKR Real 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 KKR Real Estate 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 KKR Real i.e., KKR Real and Nexpoint Real go up and down completely randomly.
Pair Corralation between KKR Real and Nexpoint Real
Given the investment horizon of 90 days KKR Real Estate is expected to under-perform the Nexpoint Real. In addition to that, KKR Real is 1.03 times more volatile than Nexpoint Real Estate. It trades about -0.16 of its total potential returns per unit of risk. Nexpoint Real Estate is currently generating about -0.15 per unit of volatility. If you would invest 1,697 in Nexpoint Real Estate on November 4, 2024 and sell it today you would lose (156.00) from holding Nexpoint Real Estate or give up 9.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KKR Real Estate vs. Nexpoint Real Estate
Performance |
| Timeline |
| KKR Real Estate |
| Nexpoint Real Estate |
KKR Real and Nexpoint Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KKR Real and Nexpoint Real
The main advantage of trading using opposite KKR Real and Nexpoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Real 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.| KKR Real vs. Ellington Financial | KKR Real vs. Dynex Capital | KKR Real vs. Ares Commercial Real | KKR Real vs. Cherry Hill Mortgage |
| Nexpoint Real vs. Ellington Residential Mortgage | Nexpoint Real vs. Ares Commercial Real | Nexpoint Real vs. TPG RE Finance | Nexpoint Real vs. Ellington Financial |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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