Correlation Between NexPoint Real and Inpoint Commercial
Can any of the company-specific risk be diversified away by investing in both NexPoint Real and Inpoint Commercial 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 Real and Inpoint Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexPoint Real Estate and Inpoint Commercial Real, you can compare the effects of market volatilities on NexPoint Real and Inpoint Commercial 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 Real with a short position of Inpoint Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Real and Inpoint Commercial.
Diversification Opportunities for NexPoint Real and Inpoint Commercial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NexPoint and Inpoint is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Real Estate and Inpoint Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpoint Commercial Real and NexPoint 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 NexPoint Real Estate are associated (or correlated) with Inpoint Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpoint Commercial Real has no effect on the direction of NexPoint Real i.e., NexPoint Real and Inpoint Commercial go up and down completely randomly.
Pair Corralation between NexPoint Real and Inpoint Commercial
Assuming the 90 days trading horizon NexPoint Real Estate is expected to generate 0.73 times more return on investment than Inpoint Commercial. However, NexPoint Real Estate is 1.38 times less risky than Inpoint Commercial. It trades about -0.02 of its potential returns per unit of risk. Inpoint Commercial Real is currently generating about -0.1 per unit of risk. If you would invest 2,381 in NexPoint Real Estate on September 1, 2024 and sell it today you would lose (11.00) from holding NexPoint Real Estate or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexPoint Real Estate vs. Inpoint Commercial Real
Performance |
| Timeline |
| NexPoint Real Estate |
| Inpoint Commercial Real |
NexPoint Real and Inpoint Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexPoint Real and Inpoint Commercial
The main advantage of trading using opposite NexPoint Real and Inpoint Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Real position performs unexpectedly, Inpoint Commercial 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 Inpoint Commercial will offset losses from the drop in Inpoint Commercial's long position.| NexPoint Real vs. ACRES Commercial Realty | NexPoint Real vs. Dynex Capital | NexPoint Real vs. PennyMac Mortgage Investment | NexPoint Real vs. AG Mortgage Investment |
| Inpoint Commercial vs. Invesco Mortgage Capital | Inpoint Commercial vs. ARMOUR Residential REIT | Inpoint Commercial vs. Chimera Investment | Inpoint Commercial vs. Cherry Hill Mortgage |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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