Correlation Between NexPoint Strategic and Global Net

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

Diversification Opportunities for NexPoint Strategic and Global Net

0.61

Correlation Coefficient

NexPoint Strategic  Global Net

Poor diversification

The 3 months correlation between NexPoint and Global is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Strategic Opportuniti and Global Net Lease, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease, 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease, has no effect on the direction of NexPoint Strategic i.e., NexPoint Strategic and Global Net go up and down completely randomly.

Pair Corralation between NexPoint Strategic and Global Net

Given the investment horizon of 90 days NexPoint Strategic Opportunities is expected to generate 1.61 times more return on investment than Global Net. However, NexPoint Strategic is 1.61 times more volatile than Global Net Lease,. It trades about 0.03 of its potential returns per unit of risk. Global Net Lease, is currently generating about -0.11 per unit of risk. If you would invest  560.00  in NexPoint Strategic Opportunities on September 3, 2024 and sell it today you would earn a total of  19.00  from holding NexPoint Strategic Opportunities or generate 3.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

NexPoint Strategic Opportuniti  vs.  Global Net Lease,

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 stable fundamental indicators, NexPoint Strategic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Global Net Lease,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Net Lease, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with NexPoint Strategic and Global Net

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

The idea behind NexPoint Strategic Opportunities and Global Net Lease, 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.