Correlation Between NexPoint Strategic and Gaucho Group

Can any of the company-specific risk be diversified away by investing in both NexPoint Strategic and Gaucho Group 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 Gaucho Group 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 Gaucho Group Holdings, you can compare the effects of market volatilities on NexPoint Strategic and Gaucho Group 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 Gaucho Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexPoint Strategic and Gaucho Group.

Diversification Opportunities for NexPoint Strategic and Gaucho Group

-0.72

Correlation Coefficient

NexPoint Strategic  Gaucho Group

Pay attention - limited upside

The 3 months correlation between NexPoint and Gaucho is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Strategic Opportuniti and Gaucho Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaucho Group Holdings 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 Gaucho Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaucho Group Holdings has no effect on the direction of NexPoint Strategic i.e., NexPoint Strategic and Gaucho Group go up and down completely randomly.

Pair Corralation between NexPoint Strategic and Gaucho Group

If you would invest  579.00  in NexPoint Strategic Opportunities on September 29, 2024 and sell it today you would earn a total of  58.00  from holding NexPoint Strategic Opportunities or generate 10.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

NexPoint Strategic Opportuniti  vs.  Gaucho Group Holdings

NexPoint Strategic

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NexPoint Strategic Opportunities are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, NexPoint Strategic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gaucho Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaucho Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with NexPoint Strategic and Gaucho Group

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

The idea behind NexPoint Strategic Opportunities and Gaucho Group Holdings 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.