Correlation Between NexPoint Hospitality and Quisitive Technology
Can any of the company-specific risk be diversified away by investing in both NexPoint Hospitality and Quisitive Technology 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 Quisitive Technology 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 Quisitive Technology Solutions, you can compare the effects of market volatilities on NexPoint Hospitality and Quisitive Technology 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 Quisitive Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Hospitality and Quisitive Technology.
Diversification Opportunities for NexPoint Hospitality and Quisitive Technology
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between NexPoint and Quisitive is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Hospitality Trust and Quisitive Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quisitive Technology 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 Quisitive Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quisitive Technology has no effect on the direction of NexPoint Hospitality i.e., NexPoint Hospitality and Quisitive Technology go up and down completely randomly.
Pair Corralation between NexPoint Hospitality and Quisitive Technology
Assuming the 90 days trading horizon NexPoint Hospitality Trust is expected to generate 4.4 times more return on investment than Quisitive Technology. However, NexPoint Hospitality is 4.4 times more volatile than Quisitive Technology Solutions. It trades about 0.02 of its potential returns per unit of risk. Quisitive Technology Solutions is currently generating about 0.01 per unit of risk. If you would invest 82.00 in NexPoint Hospitality Trust on August 27, 2024 and sell it today you would lose (80.50) from holding NexPoint Hospitality Trust or give up 98.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexPoint Hospitality Trust vs. Quisitive Technology Solutions
Performance |
| Timeline |
| NexPoint Hospitality |
| Quisitive Technology |
NexPoint Hospitality and Quisitive Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexPoint Hospitality and Quisitive Technology
The main advantage of trading using opposite NexPoint Hospitality and Quisitive Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Hospitality position performs unexpectedly, Quisitive Technology 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 Quisitive Technology will offset losses from the drop in Quisitive Technology's long position.| NexPoint Hospitality vs. Brookfield Investments | NexPoint Hospitality vs. SalesforceCom CDR | NexPoint Hospitality vs. Westshore Terminals Investment | NexPoint Hospitality vs. Chemtrade Logistics Income |
| Quisitive Technology vs. Telus Corp | Quisitive Technology vs. Toronto Dominion Bank | Quisitive Technology vs. Manulife Financial Corp | Quisitive Technology vs. Canadian Natural Resources |
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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