Correlation Between Northstar Clean and NexPoint Hospitality
Can any of the company-specific risk be diversified away by investing in both Northstar Clean and NexPoint Hospitality 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 Northstar Clean and NexPoint Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northstar Clean Technologies and NexPoint Hospitality Trust, you can compare the effects of market volatilities on Northstar Clean and NexPoint Hospitality 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 Northstar Clean with a short position of NexPoint Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and NexPoint Hospitality.
Diversification Opportunities for Northstar Clean and NexPoint Hospitality
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Northstar and NexPoint is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and NexPoint Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Hospitality and Northstar Clean 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 Northstar Clean Technologies are associated (or correlated) with NexPoint Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexPoint Hospitality has no effect on the direction of Northstar Clean i.e., Northstar Clean and NexPoint Hospitality go up and down completely randomly.
Pair Corralation between Northstar Clean and NexPoint Hospitality
Assuming the 90 days trading horizon Northstar Clean is expected to generate 77.46 times less return on investment than NexPoint Hospitality. But when comparing it to its historical volatility, Northstar Clean Technologies is 53.57 times less risky than NexPoint Hospitality. It trades about 0.15 of its potential returns per unit of risk. NexPoint Hospitality Trust is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.50 in NexPoint Hospitality Trust on August 30, 2024 and sell it today you would earn a total of 29.50 from holding NexPoint Hospitality Trust or generate 1966.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northstar Clean Technologies vs. NexPoint Hospitality Trust
Performance |
| Timeline |
| Northstar Clean Tech |
| NexPoint Hospitality |
Northstar Clean and NexPoint Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and NexPoint Hospitality
The main advantage of trading using opposite Northstar Clean and NexPoint Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, NexPoint Hospitality 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 Hospitality will offset losses from the drop in NexPoint Hospitality's long position.| Northstar Clean vs. Cielo Waste Solutions | Northstar Clean vs. CHAR Technologies | Northstar Clean vs. iShares Canadian HYBrid | Northstar Clean vs. Altagas Cum Red |
| NexPoint Hospitality vs. Bip Investment Corp | NexPoint Hospitality vs. CNJ Capital Investments | NexPoint Hospitality vs. Diversified Royalty Corp | NexPoint Hospitality vs. Economic Investment Trust |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |