Correlation Between Medalist Diversified and NexPoint Strategic

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

By analyzing existing cross correlation between Medalist Diversified Reit and NexPoint Strategic Opportunities, you can compare the effects of market volatilities on Medalist Diversified and NexPoint Strategic 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 Medalist Diversified with a short position of NexPoint Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medalist Diversified and NexPoint Strategic.

Diversification Opportunities for Medalist Diversified and NexPoint Strategic

0.33

Correlation Coefficient

Medalist Diversified  NexPoint Strategic

Weak diversification

The 3 months correlation between Medalist and NexPoint is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Medalist Diversified Reit and NexPoint Strategic Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexPoint Strategic and Medalist Diversified 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 Medalist Diversified Reit are associated (or correlated) with NexPoint Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexPoint Strategic has no effect on the direction of Medalist Diversified i.e., Medalist Diversified and NexPoint Strategic go up and down completely randomly.

Pair Corralation between Medalist Diversified and NexPoint Strategic

Given the investment horizon of 90 days Medalist Diversified Reit is expected to generate 0.81 times more return on investment than NexPoint Strategic. However, Medalist Diversified Reit is 1.23 times less risky than NexPoint Strategic. It trades about 0.03 of its potential returns per unit of risk. NexPoint Strategic Opportunities is currently generating about -0.26 per unit of risk. If you would invest  1,282  in Medalist Diversified Reit on January 4, 2025 and sell it today you would earn a total of  37.00  from holding Medalist Diversified Reit or generate 2.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.8%
Values	Daily Returns

Medalist Diversified Reit  vs.  NexPoint Strategic Opportuniti

Medalist Diversified Reit

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Medalist Diversified Reit are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Medalist Diversified is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

NexPoint Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days NexPoint Strategic Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Medalist Diversified and NexPoint Strategic

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

The idea behind Medalist Diversified Reit and NexPoint Strategic Opportunities 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.