Correlation Between NexPoint Strategic and SiriusPoint
Can any of the company-specific risk be diversified away by investing in both NexPoint Strategic and SiriusPoint 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 SiriusPoint 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 SiriusPoint, you can compare the effects of market volatilities on NexPoint Strategic and SiriusPoint 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 SiriusPoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Strategic and SiriusPoint.
Diversification Opportunities for NexPoint Strategic and SiriusPoint
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NexPoint and SiriusPoint is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Strategic Opportuniti and SiriusPoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiriusPoint 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 SiriusPoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SiriusPoint has no effect on the direction of NexPoint Strategic i.e., NexPoint Strategic and SiriusPoint go up and down completely randomly.
Pair Corralation between NexPoint Strategic and SiriusPoint
Given the investment horizon of 90 days NexPoint Strategic Opportunities is expected to generate 6.58 times more return on investment than SiriusPoint. However, NexPoint Strategic is 6.58 times more volatile than SiriusPoint. It trades about 0.08 of its potential returns per unit of risk. SiriusPoint is currently generating about 0.11 per unit of risk. If you would invest 528.00 in NexPoint Strategic Opportunities on August 26, 2024 and sell it today you would earn a total of 19.00 from holding NexPoint Strategic Opportunities or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexPoint Strategic Opportuniti vs. SiriusPoint
Performance |
| Timeline |
| NexPoint Strategic |
| SiriusPoint |
NexPoint Strategic and SiriusPoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexPoint Strategic and SiriusPoint
The main advantage of trading using opposite NexPoint Strategic and SiriusPoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Strategic position performs unexpectedly, SiriusPoint 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 SiriusPoint will offset losses from the drop in SiriusPoint'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 |
| SiriusPoint vs. RLJ Lodging Trust | SiriusPoint vs. Argo Group International | SiriusPoint vs. New York Mortgage | SiriusPoint vs. Aquagold International |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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