Correlation Between NexPoint Diversified and CTO Realty
Can any of the company-specific risk be diversified away by investing in both NexPoint Diversified and CTO Realty 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 Diversified and CTO Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexPoint Diversified Real and CTO Realty Growth, you can compare the effects of market volatilities on NexPoint Diversified and CTO Realty 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 Diversified with a short position of CTO Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Diversified and CTO Realty.
Diversification Opportunities for NexPoint Diversified and CTO Realty
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NexPoint and CTO is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Diversified Real and CTO Realty Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTO Realty Growth and NexPoint Diversified 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 Diversified Real are associated (or correlated) with CTO Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTO Realty Growth has no effect on the direction of NexPoint Diversified i.e., NexPoint Diversified and CTO Realty go up and down completely randomly.
Pair Corralation between NexPoint Diversified and CTO Realty
Assuming the 90 days trading horizon NexPoint Diversified Real is expected to generate 0.67 times more return on investment than CTO Realty. However, NexPoint Diversified Real is 1.49 times less risky than CTO Realty. It trades about 0.22 of its potential returns per unit of risk. CTO Realty Growth is currently generating about 0.05 per unit of risk. If you would invest 1,556 in NexPoint Diversified Real on August 26, 2024 and sell it today you would earn a total of 62.00 from holding NexPoint Diversified Real or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexPoint Diversified Real vs. CTO Realty Growth
Performance |
| Timeline |
| NexPoint Diversified Real |
| CTO Realty Growth |
NexPoint Diversified and CTO Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexPoint Diversified and CTO Realty
The main advantage of trading using opposite NexPoint Diversified and CTO Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Diversified position performs unexpectedly, CTO Realty 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 CTO Realty will offset losses from the drop in CTO Realty's long position.| NexPoint Diversified vs. NexPoint Strategic Opportunities | NexPoint Diversified vs. Prospect Capital | NexPoint Diversified vs. Ready Capital | NexPoint Diversified vs. SiriusPoint |
| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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