Correlation Between Rithm Property and NexPoint Real
Can any of the company-specific risk be diversified away by investing in both Rithm Property and NexPoint Real 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 Property and NexPoint Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rithm Property Trust and NexPoint Real Estate, you can compare the effects of market volatilities on Rithm Property and NexPoint Real 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 Property with a short position of NexPoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Property and NexPoint Real.
Diversification Opportunities for Rithm Property and NexPoint Real
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rithm and NexPoint is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Property Trust and NexPoint Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Real Estate and Rithm Property 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 Property Trust are associated (or correlated) with NexPoint Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexPoint Real Estate has no effect on the direction of Rithm Property i.e., Rithm Property and NexPoint Real go up and down completely randomly.
Pair Corralation between Rithm Property and NexPoint Real
Considering the 90-day investment horizon Rithm Property Trust is expected to under-perform the NexPoint Real. In addition to that, Rithm Property is 1.25 times more volatile than NexPoint Real Estate. It trades about -0.05 of its total potential returns per unit of risk. NexPoint Real Estate is currently generating about 0.0 per unit of volatility. If you would invest 2,378 in NexPoint Real Estate on September 12, 2024 and sell it today you would lose (3.00) from holding NexPoint Real Estate or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rithm Property Trust vs. NexPoint Real Estate
Performance |
| Timeline |
| Rithm Property Trust |
| NexPoint Real Estate |
Rithm Property and NexPoint Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Property and NexPoint Real
The main advantage of trading using opposite Rithm Property and NexPoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Property position performs unexpectedly, NexPoint Real 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 Real will offset losses from the drop in NexPoint Real's long position.| Rithm Property vs. Urban Edge Properties | Rithm Property vs. Kite Realty Group | Rithm Property vs. Retail Opportunity Investments | Rithm Property vs. Inventrust Properties Corp |
| NexPoint Real vs. ACRES Commercial Realty | NexPoint Real vs. Dynex Capital | NexPoint Real vs. PennyMac Mortgage Investment | NexPoint Real vs. AG Mortgage 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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