Correlation Between KKR Real and Nexpoint Real

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

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

Diversification Opportunities for KKR Real and Nexpoint Real

0.26

Correlation Coefficient

KKR Real  Nexpoint Real

Modest diversification

The 3 months correlation between KKR and Nexpoint is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KKR Real Estate 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 KKR Real 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 KKR Real Estate 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 KKR Real i.e., KKR Real and Nexpoint Real go up and down completely randomly.

Pair Corralation between KKR Real and Nexpoint Real

Given the investment horizon of 90 days KKR Real Estate is expected to generate 0.78 times more return on investment than Nexpoint Real. However, KKR Real Estate is 1.29 times less risky than Nexpoint Real. It trades about 0.02 of its potential returns per unit of risk. Nexpoint Real Estate is currently generating about 0.0 per unit of risk. If you would invest  909.00  in KKR Real Estate on May 19, 2025 and sell it today you would earn a total of  14.00  from holding KKR Real Estate or generate 1.54% return on investment over 90 days.

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

KKR Real Estate  vs.  Nexpoint Real Estate

KKR Real Estate

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KKR Real Estate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, KKR Real is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KKR Real and Nexpoint Real

The main advantage of trading using opposite KKR Real and Nexpoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KKR Real 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 KKR Real Estate 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.