Correlation Between Nexpoint Real and Ladder Capital
Can any of the company-specific risk be diversified away by investing in both Nexpoint Real and Ladder 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 Ladder 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 Ladder Capital Corp, you can compare the effects of market volatilities on Nexpoint Real and Ladder 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 Ladder Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexpoint Real and Ladder Capital.
Diversification Opportunities for Nexpoint Real and Ladder Capital
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexpoint and Ladder is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nexpoint Real Estate and Ladder Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladder 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 Ladder Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladder Capital Corp has no effect on the direction of Nexpoint Real i.e., Nexpoint Real and Ladder Capital go up and down completely randomly.
Pair Corralation between Nexpoint Real and Ladder Capital
Given the investment horizon of 90 days Nexpoint Real Estate is expected to generate 1.84 times more return on investment than Ladder Capital. However, Nexpoint Real is 1.84 times more volatile than Ladder Capital Corp. It trades about 0.41 of its potential returns per unit of risk. Ladder Capital Corp is currently generating about 0.16 per unit of risk. If you would invest 1,428 in Nexpoint Real Estate on August 28, 2024 and sell it today you would earn a total of 284.00 from holding Nexpoint Real Estate or generate 19.89% 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. Ladder Capital Corp
Performance |
| Timeline |
| Nexpoint Real Estate |
| Ladder Capital Corp |
Nexpoint Real and Ladder Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexpoint Real and Ladder Capital
The main advantage of trading using opposite Nexpoint Real and Ladder Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexpoint Real position performs unexpectedly, Ladder 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 Ladder Capital will offset losses from the drop in Ladder Capital'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 |
| Ladder Capital vs. KKR Real Estate | Ladder Capital vs. Ares Commercial Real | Ladder Capital vs. Ellington Residential Mortgage | Ladder Capital vs. Claros Mortgage Trust |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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