Correlation Between Peakstone Realty and NexPoint Strategic

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Can any of the company-specific risk be diversified away by investing in both Peakstone Realty and NexPoint Strategic 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 Peakstone Realty and NexPoint Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peakstone Realty Trust and NexPoint Strategic Opportunities, you can compare the effects of market volatilities on Peakstone Realty and NexPoint Strategic 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 Peakstone Realty with a short position of NexPoint Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peakstone Realty and NexPoint Strategic.

Diversification Opportunities for Peakstone Realty and NexPoint Strategic

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Peakstone and NexPoint is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Peakstone Realty Trust and NexPoint Strategic Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Strategic and Peakstone Realty 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 Peakstone Realty Trust are associated (or correlated) with NexPoint Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexPoint Strategic has no effect on the direction of Peakstone Realty i.e., Peakstone Realty and NexPoint Strategic go up and down completely randomly.

Pair Corralation between Peakstone Realty and NexPoint Strategic

Given the investment horizon of 90 days Peakstone Realty Trust is expected to generate 1.26 times more return on investment than NexPoint Strategic. However, Peakstone Realty is 1.26 times more volatile than NexPoint Strategic Opportunities. It trades about -0.04 of its potential returns per unit of risk. NexPoint Strategic Opportunities is currently generating about -0.28 per unit of risk. If you would invest  1,107  in Peakstone Realty Trust on November 1, 2024 and sell it today you would lose (28.00) from holding Peakstone Realty Trust or give up 2.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Peakstone Realty Trust  vs.  NexPoint Strategic Opportuniti

 Performance 
       Timeline  
Peakstone Realty Trust 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Peakstone Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
NexPoint Strategic 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in NexPoint Strategic Opportunities are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, NexPoint Strategic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Peakstone Realty and NexPoint Strategic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Peakstone Realty and NexPoint Strategic

The main advantage of trading using opposite Peakstone Realty and NexPoint Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peakstone Realty position performs unexpectedly, NexPoint Strategic 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 NexPoint Strategic will offset losses from the drop in NexPoint Strategic's long position.
The idea behind Peakstone Realty Trust and NexPoint Strategic Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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