Correlation Between Rithm Capital and Maxus Realty
Can any of the company-specific risk be diversified away by investing in both Rithm Capital and Maxus 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 Rithm Capital and Maxus Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rithm Capital Corp and Maxus Realty Trust, you can compare the effects of market volatilities on Rithm Capital and Maxus 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 Rithm Capital with a short position of Maxus Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and Maxus Realty.
Diversification Opportunities for Rithm Capital and Maxus Realty
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rithm and Maxus is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp and Maxus Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxus Realty Trust and Rithm Capital 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 Rithm Capital Corp are associated (or correlated) with Maxus Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxus Realty Trust has no effect on the direction of Rithm Capital i.e., Rithm Capital and Maxus Realty go up and down completely randomly.
Pair Corralation between Rithm Capital and Maxus Realty
Assuming the 90 days trading horizon Rithm Capital is expected to generate 1.28 times less return on investment than Maxus Realty. But when comparing it to its historical volatility, Rithm Capital Corp is 7.08 times less risky than Maxus Realty. It trades about 0.1 of its potential returns per unit of risk. Maxus Realty Trust is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13,659 in Maxus Realty Trust on August 27, 2024 and sell it today you would lose (1,659) from holding Maxus Realty Trust or give up 12.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
Rithm Capital Corp vs. Maxus Realty Trust
Performance |
| Timeline |
| Rithm Capital Corp |
| Maxus Realty Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rithm Capital and Maxus Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Capital and Maxus Realty
The main advantage of trading using opposite Rithm Capital and Maxus Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Capital position performs unexpectedly, Maxus 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 Maxus Realty will offset losses from the drop in Maxus Realty's long position.The idea behind Rithm Capital Corp and Maxus Realty Trust 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.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |