Correlation Between Nexpoint Real and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Nexpoint Real and Angel Oak 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 Angel Oak 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 Angel Oak Mortgage, you can compare the effects of market volatilities on Nexpoint Real and Angel Oak 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 Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexpoint Real and Angel Oak.
Diversification Opportunities for Nexpoint Real and Angel Oak
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nexpoint and Angel is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nexpoint Real Estate and Angel Oak Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Mortgage 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Mortgage has no effect on the direction of Nexpoint Real i.e., Nexpoint Real and Angel Oak go up and down completely randomly.
Pair Corralation between Nexpoint Real and Angel Oak
Given the investment horizon of 90 days Nexpoint Real Estate is expected to generate 1.09 times more return on investment than Angel Oak. However, Nexpoint Real is 1.09 times more volatile than Angel Oak Mortgage. It trades about 0.03 of its potential returns per unit of risk. Angel Oak Mortgage is currently generating about 0.03 per unit of risk. If you would invest 996.00 in Nexpoint Real Estate on January 13, 2025 and sell it today you would earn a total of 285.00 from holding Nexpoint Real Estate or generate 28.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexpoint Real Estate vs. Angel Oak Mortgage
Performance |
| Timeline |
| Nexpoint Real Estate |
| Angel Oak Mortgage |
Nexpoint Real and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexpoint Real and Angel Oak
The main advantage of trading using opposite Nexpoint Real and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexpoint Real position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Nexpoint Real vs. Ellington Residential Mortgage | Nexpoint Real vs. Ares Commercial Real | Nexpoint Real vs. TPG RE Finance | Nexpoint Real vs. Ellington Financial |
| Angel Oak vs. Granite Point Mortgage | Angel Oak vs. MFA Financial | Angel Oak vs. Two Harbors Investments | Angel Oak vs. PennyMac Mortgage Investment |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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