Correlation Between NexPoint Strategic and Ascendas India

Can any of the company-specific risk be diversified away by investing in both NexPoint Strategic and Ascendas India 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 Strategic and Ascendas India into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NexPoint Strategic Opportunities and Ascendas India Trust, you can compare the effects of market volatilities on NexPoint Strategic and Ascendas India 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 Strategic with a short position of Ascendas India. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Strategic and Ascendas India.

Diversification Opportunities for NexPoint Strategic and Ascendas India

0.18

Correlation Coefficient

NexPoint Strategic  Ascendas India

Average diversification

The 3 months correlation between NexPoint and Ascendas is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Strategic Opportuniti and Ascendas India Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendas India Trust and NexPoint Strategic 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 Strategic Opportunities are associated (or correlated) with Ascendas India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendas India Trust has no effect on the direction of NexPoint Strategic i.e., NexPoint Strategic and Ascendas India go up and down completely randomly.

Pair Corralation between NexPoint Strategic and Ascendas India

Given the investment horizon of 90 days NexPoint Strategic Opportunities is expected to under-perform the Ascendas India. In addition to that, NexPoint Strategic is 1.11 times more volatile than Ascendas India Trust. It trades about -0.04 of its total potential returns per unit of risk. Ascendas India Trust is currently generating about -0.01 per unit of volatility. If you would invest  79.00  in Ascendas India Trust on December 5, 2024 and sell it today you would lose (2.00) from holding Ascendas India Trust or give up 2.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	79.66%
Values	Daily Returns

NexPoint Strategic Opportuniti  vs.  Ascendas India Trust

NexPoint Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days NexPoint Strategic Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Ascendas India Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ascendas India Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Ascendas India is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NexPoint Strategic and Ascendas India

The main advantage of trading using opposite NexPoint Strategic and Ascendas India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexPoint Strategic position performs unexpectedly, Ascendas India 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 Ascendas India will offset losses from the drop in Ascendas India's long position.

The idea behind NexPoint Strategic Opportunities and Ascendas India 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.