Correlation Between Nexpoint Real and Mainstay Short
Can any of the company-specific risk be diversified away by investing in both Nexpoint Real and Mainstay Short 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 Mainstay Short 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 Mainstay Short Duration, you can compare the effects of market volatilities on Nexpoint Real and Mainstay Short 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 Mainstay Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexpoint Real and Mainstay Short.
Diversification Opportunities for Nexpoint Real and Mainstay Short
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nexpoint and Mainstay is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nexpoint Real Estate and Mainstay Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Short Duration 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 Mainstay Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Short Duration has no effect on the direction of Nexpoint Real i.e., Nexpoint Real and Mainstay Short go up and down completely randomly.
Pair Corralation between Nexpoint Real and Mainstay Short
Assuming the 90 days horizon Nexpoint Real Estate is expected to under-perform the Mainstay Short. In addition to that, Nexpoint Real is 1.9 times more volatile than Mainstay Short Duration. It trades about -0.17 of its total potential returns per unit of risk. Mainstay Short Duration is currently generating about 0.45 per unit of volatility. If you would invest 949.00 in Mainstay Short Duration on October 25, 2024 and sell it today you would earn a total of 10.00 from holding Mainstay Short Duration or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Nexpoint Real Estate vs. Mainstay Short Duration
Performance |
| Timeline |
| Nexpoint Real Estate |
| Mainstay Short Duration |
Nexpoint Real and Mainstay Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexpoint Real and Mainstay Short
The main advantage of trading using opposite Nexpoint Real and Mainstay Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexpoint Real position performs unexpectedly, Mainstay Short 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 Mainstay Short will offset losses from the drop in Mainstay Short's long position.| Nexpoint Real vs. Vanguard Total Stock | Nexpoint Real vs. Vanguard 500 Index | Nexpoint Real vs. Vanguard Total Stock | Nexpoint Real vs. Vanguard Total Stock |
| Mainstay Short vs. Commonwealth Real Estate | Mainstay Short vs. Fidelity Real Estate | Mainstay Short vs. Nexpoint Real Estate | Mainstay Short vs. Forum Real Estate |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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