Correlation Between Nexpoint Real and Catalystwarrington

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

Diversification Opportunities for Nexpoint Real and Catalystwarrington

NexpointCatalystwarringtonDiversified AwayNexpointCatalystwarringtonDiversified Away100%
0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Nexpoint and Catalystwarrington is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nexpoint Real Estate and Catalystwarrington Strategic P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystwarrington and Nexpoint Real 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 Nexpoint Real Estate are associated (or correlated) with Catalystwarrington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystwarrington has no effect on the direction of Nexpoint Real i.e., Nexpoint Real and Catalystwarrington go up and down completely randomly.

Pair Corralation between Nexpoint Real and Catalystwarrington

Assuming the 90 days horizon Nexpoint Real Estate is expected to under-perform the Catalystwarrington. In addition to that, Nexpoint Real is 3.99 times more volatile than Catalystwarrington Strategic Program. It trades about -0.03 of its total potential returns per unit of risk. Catalystwarrington Strategic Program is currently generating about 0.05 per unit of volatility. If you would invest  920.00  in Catalystwarrington Strategic Program on October 20, 2024 and sell it today you would earn a total of  3.00  from holding Catalystwarrington Strategic Program or generate 0.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.39%
ValuesDaily Returns

Nexpoint Real Estate  vs.  Catalystwarrington Strategic P

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -4-3-2-10
JavaScript chart by amCharts 3.21.15NRSCX CWXIX
       Timeline  
Nexpoint Real Estate 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nexpoint Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Nexpoint Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan15.615.715.815.91616.116.216.316.4
Catalystwarrington 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Catalystwarrington Strategic Program are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Catalystwarrington is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9.29.219.229.239.249.259.269.27

Nexpoint Real and Catalystwarrington Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.68-0.46-0.24-0.0782-0.0150.04310.120.340.560.78 5101520253035
JavaScript chart by amCharts 3.21.15NRSCX CWXIX
       Returns  

Pair Trading with Nexpoint Real and Catalystwarrington

The main advantage of trading using opposite Nexpoint Real and Catalystwarrington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexpoint Real position performs unexpectedly, Catalystwarrington 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 Catalystwarrington will offset losses from the drop in Catalystwarrington's long position.
The idea behind Nexpoint Real Estate and Catalystwarrington Strategic Program 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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