Correlation Between NexPoint Real and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both NexPoint Real and Sachem Capital 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 Sachem Capital 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 Sachem Capital Corp, you can compare the effects of market volatilities on NexPoint Real and Sachem Capital 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 Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Real and Sachem Capital.
Diversification Opportunities for NexPoint Real and Sachem Capital
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NexPoint and Sachem is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Real Estate and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp 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 Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of NexPoint Real i.e., NexPoint Real and Sachem Capital go up and down completely randomly.
Pair Corralation between NexPoint Real and Sachem Capital
Assuming the 90 days trading horizon NexPoint Real Estate is expected to generate 0.5 times more return on investment than Sachem Capital. However, NexPoint Real Estate is 2.01 times less risky than Sachem Capital. It trades about 0.03 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about -0.35 per unit of risk. If you would invest 2,375 in NexPoint Real Estate on August 30, 2024 and sell it today you would earn a total of 15.00 from holding NexPoint Real Estate or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexPoint Real Estate vs. Sachem Capital Corp
Performance |
| Timeline |
| NexPoint Real Estate |
| Sachem Capital Corp |
NexPoint Real and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexPoint Real and Sachem Capital
The main advantage of trading using opposite NexPoint Real and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Real position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital'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 |
| Sachem Capital vs. SiriusPoint | Sachem Capital vs. Harrow Health 8625 | Sachem Capital vs. XOMA Corporation | Sachem Capital vs. New York 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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