Correlation Between Rithm Capital and Maxus Realty

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

By analyzing existing cross correlation between Rithm Capital Corp and Maxus Realty Trust, you can compare the effects of market volatilities on Rithm Capital and Maxus Realty 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 Rithm Capital with a short position of Maxus Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and Maxus Realty.

Diversification Opportunities for Rithm Capital and Maxus Realty

-0.74

Correlation Coefficient

Rithm Capital  Maxus Realty

Pay attention - limited upside

The 3 months correlation between Rithm and Maxus is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp and Maxus Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxus Realty Trust and Rithm Capital 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 Rithm Capital Corp are associated (or correlated) with Maxus Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxus Realty Trust has no effect on the direction of Rithm Capital i.e., Rithm Capital and Maxus Realty go up and down completely randomly.

Pair Corralation between Rithm Capital and Maxus Realty

If you would invest  2,433  in Rithm Capital Corp on September 2, 2024 and sell it today you would earn a total of  90.00  from holding Rithm Capital Corp or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Rithm Capital Corp  vs.  Maxus Realty Trust

Rithm Capital Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rithm Capital Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Rithm Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Maxus Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maxus Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Maxus Realty is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Rithm Capital and Maxus Realty

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

The idea behind Rithm Capital Corp and Maxus Realty 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.