Correlation Between NexPoint Strategic and CTO Realty
Can any of the company-specific risk be diversified away by investing in both NexPoint Strategic 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 Strategic 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 Strategic Opportunities and CTO Realty Growth, you can compare the effects of market volatilities on NexPoint Strategic 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 Strategic with a short position of CTO Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Strategic and CTO Realty.
Diversification Opportunities for NexPoint Strategic and CTO Realty
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NexPoint and CTO is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Strategic Opportuniti 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 Strategic 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 Strategic Opportunities 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 Strategic i.e., NexPoint Strategic and CTO Realty go up and down completely randomly.
Pair Corralation between NexPoint Strategic and CTO Realty
Given the investment horizon of 90 days NexPoint Strategic Opportunities is expected to under-perform the CTO Realty. In addition to that, NexPoint Strategic is 1.73 times more volatile than CTO Realty Growth. It trades about -0.1 of its total potential returns per unit of risk. CTO Realty Growth is currently generating about -0.14 per unit of volatility. If you would invest 2,443 in CTO Realty Growth on August 24, 2024 and sell it today you would lose (90.00) from holding CTO Realty Growth or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexPoint Strategic Opportuniti vs. CTO Realty Growth
Performance |
| Timeline |
| NexPoint Strategic |
| CTO Realty Growth |
NexPoint Strategic and CTO Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexPoint Strategic and CTO Realty
The main advantage of trading using opposite NexPoint Strategic and CTO Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Strategic 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 Strategic vs. Modiv Inc | NexPoint Strategic vs. Gladstone Commercial Corp | NexPoint Strategic vs. CTO Realty Growth | NexPoint Strategic vs. Broadstone Net Lease |
| CTO Realty vs. City Office REIT | CTO Realty vs. Armada Hoffler Properties | CTO Realty vs. Digital Realty Trust | CTO Realty vs. Global 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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