Correlation Between Short Oil and Nexpoint Real
Can any of the company-specific risk be diversified away by investing in both Short Oil 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 Short Oil and Nexpoint Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Oil Gas and Nexpoint Real Estate, you can compare the effects of market volatilities on Short Oil 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 Short Oil with a short position of Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Oil and Nexpoint Real.
Diversification Opportunities for Short Oil and Nexpoint Real
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Short and Nexpoint is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas 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 Short Oil 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 Short Oil Gas 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 Short Oil i.e., Short Oil and Nexpoint Real go up and down completely randomly.
Pair Corralation between Short Oil and Nexpoint Real
Assuming the 90 days horizon Short Oil Gas is expected to generate 3.84 times more return on investment than Nexpoint Real. However, Short Oil is 3.84 times more volatile than Nexpoint Real Estate. It trades about 0.35 of its potential returns per unit of risk. Nexpoint Real Estate is currently generating about 0.34 per unit of risk. If you would invest 1,357 in Short Oil Gas on September 15, 2024 and sell it today you would earn a total of 92.00 from holding Short Oil Gas or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Oil Gas vs. Nexpoint Real Estate
Performance |
| Timeline |
| Short Oil Gas |
| Nexpoint Real Estate |
Short Oil and Nexpoint Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Oil and Nexpoint Real
The main advantage of trading using opposite Short Oil and Nexpoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Oil 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.| Short Oil vs. Short Real Estate | Short Oil vs. Short Real Estate | Short Oil vs. Ultrashort Mid Cap Profund | Short Oil vs. Ultrashort Mid Cap Profund |
| Nexpoint Real vs. Oil Gas Ultrasector | Nexpoint Real vs. Short Oil Gas | Nexpoint Real vs. World Energy Fund | Nexpoint Real vs. Energy Basic Materials |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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