Correlation Between NexPoint Strategic and Dow Jones
Can any of the company-specific risk be diversified away by investing in both NexPoint Strategic and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on NexPoint Strategic and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Strategic and Dow Jones.
Diversification Opportunities for NexPoint Strategic and Dow Jones
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NexPoint and Dow is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Strategic Opportuniti and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of NexPoint Strategic i.e., NexPoint Strategic and Dow Jones go up and down completely randomly.
Pair Corralation between NexPoint Strategic and Dow Jones
Given the investment horizon of 90 days NexPoint Strategic Opportunities is expected to under-perform the Dow Jones. In addition to that, NexPoint Strategic is 3.59 times more volatile than Dow Jones Industrial. It trades about -0.05 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,424,593 in Dow Jones Industrial on November 2, 2024 and sell it today you would earn a total of 1,063,620 from holding Dow Jones Industrial or generate 31.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NexPoint Strategic Opportuniti vs. Dow Jones Industrial
Performance |
| Timeline |
NexPoint Strategic and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
NexPoint Strategic Opportunities
Pair trading matchups for NexPoint Strategic
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with NexPoint Strategic and Dow Jones
The main advantage of trading using opposite NexPoint Strategic and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Strategic position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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