Correlation Between FrontView REIT, and NEXTDC

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

By analyzing existing cross correlation between FrontView REIT, and NEXTDC LTD, you can compare the effects of market volatilities on FrontView REIT, and NEXTDC 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 FrontView REIT, with a short position of NEXTDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and NEXTDC.

Diversification Opportunities for FrontView REIT, and NEXTDC

-0.06

Correlation Coefficient

FrontView REIT,  NEXTDC

Good diversification

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

Pair Corralation between FrontView REIT, and NEXTDC

Considering the 90-day investment horizon FrontView REIT, is expected to generate 0.61 times more return on investment than NEXTDC. However, FrontView REIT, is 1.63 times less risky than NEXTDC. It trades about -0.04 of its potential returns per unit of risk. NEXTDC LTD is currently generating about -0.08 per unit of risk. If you would invest  1,900  in FrontView REIT, on September 24, 2024 and sell it today you would lose (77.00) from holding FrontView REIT, or give up 4.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.77%
Values	Daily Returns

FrontView REIT,  vs.  NEXTDC LTD

FrontView REIT,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

NEXTDC LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEXTDC LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with FrontView REIT, and NEXTDC

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

The idea behind FrontView REIT, and NEXTDC LTD 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.