Correlation Between Chimera Investment and Nexpoint Real

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

By analyzing existing cross correlation between Chimera Investment and Nexpoint Real Estate, you can compare the effects of market volatilities on Chimera Investment and Nexpoint Real 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 Chimera Investment with a short position of Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimera Investment and Nexpoint Real.

Diversification Opportunities for Chimera Investment and Nexpoint Real

0.79

Correlation Coefficient

Chimera Investment  Nexpoint Real

Poor diversification

The 3 months correlation between Chimera and Nexpoint is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment and Nexpoint Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexpoint Real Estate and Chimera Investment 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 Chimera Investment are associated (or correlated) with Nexpoint Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexpoint Real Estate has no effect on the direction of Chimera Investment i.e., Chimera Investment and Nexpoint Real go up and down completely randomly.

Pair Corralation between Chimera Investment and Nexpoint Real

Considering the 90-day investment horizon Chimera Investment is expected to under-perform the Nexpoint Real. In addition to that, Chimera Investment is 1.61 times more volatile than Nexpoint Real Estate. It trades about -0.09 of its total potential returns per unit of risk. Nexpoint Real Estate is currently generating about 0.12 per unit of volatility. If you would invest  1,347  in Nexpoint Real Estate on August 18, 2025 and sell it today you would earn a total of  56.00  from holding Nexpoint Real Estate or generate 4.16% return on investment over 90 days.

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

Chimera Investment  vs.  Nexpoint Real Estate

Chimera Investment

Risk-Adjusted Performance

Weakest

Over the last 90 days Chimera Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Nexpoint Real Estate

Risk-Adjusted Performance

Weakest

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

Pair Trading with Chimera Investment and Nexpoint Real

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

The idea behind Chimera Investment and Nexpoint Real Estate 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.