Correlation Between NexPoint Strategic and Modiv

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

Diversification Opportunities for NexPoint Strategic and Modiv

-0.57

Correlation Coefficient

NexPoint Strategic  Modiv

Excellent diversification

The 3 months correlation between NexPoint and Modiv is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NexPoint Strategic Opportuniti and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc 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 Modiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modiv Inc has no effect on the direction of NexPoint Strategic i.e., NexPoint Strategic and Modiv go up and down completely randomly.

Pair Corralation between NexPoint Strategic and Modiv

Given the investment horizon of 90 days NexPoint Strategic Opportunities is expected to under-perform the Modiv. In addition to that, NexPoint Strategic is 1.49 times more volatile than Modiv Inc. It trades about -0.16 of its total potential returns per unit of risk. Modiv Inc is currently generating about 0.02 per unit of volatility. If you would invest  1,411  in Modiv Inc on January 11, 2025 and sell it today you would earn a total of  7.50  from holding Modiv Inc or generate 0.53% return on investment over 90 days.

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

NexPoint Strategic Opportuniti  vs.  Modiv Inc

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.

Modiv Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Modiv Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Modiv is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with NexPoint Strategic and Modiv

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

The idea behind NexPoint Strategic Opportunities and Modiv Inc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.