Correlation Between NexPoint Hospitality and North American
Can any of the company-specific risk be diversified away by investing in both NexPoint Hospitality and North American 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 NexPoint Hospitality and North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexPoint Hospitality Trust and North American Financial, you can compare the effects of market volatilities on NexPoint Hospitality and North American 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 NexPoint Hospitality with a short position of North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Hospitality and North American.
Diversification Opportunities for NexPoint Hospitality and North American
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NexPoint and North is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Hospitality Trust and North American Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Financial and NexPoint Hospitality 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 NexPoint Hospitality Trust are associated (or correlated) with North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Financial has no effect on the direction of NexPoint Hospitality i.e., NexPoint Hospitality and North American go up and down completely randomly.
Pair Corralation between NexPoint Hospitality and North American
If you would invest 678.00 in North American Financial on August 25, 2024 and sell it today you would earn a total of 81.00 from holding North American Financial or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexPoint Hospitality Trust vs. North American Financial
Performance |
| Timeline |
| NexPoint Hospitality |
| North American Financial |
NexPoint Hospitality and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexPoint Hospitality and North American
The main advantage of trading using opposite NexPoint Hospitality and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Hospitality position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.| NexPoint Hospitality vs. MTY Food Group | NexPoint Hospitality vs. Element Fleet Management | NexPoint Hospitality vs. TGS Esports | NexPoint Hospitality vs. T2 Metals Corp |
| North American vs. Walmart Inc CDR | North American vs. Amazon CDR | North American vs. UPS CDR | North American vs. HOME DEPOT CDR |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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