Correlation Between Nexpoint Residential and Marcus Millichap
Can any of the company-specific risk be diversified away by investing in both Nexpoint Residential and Marcus Millichap 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 Residential and Marcus Millichap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexpoint Residential Trust and Marcus Millichap, you can compare the effects of market volatilities on Nexpoint Residential and Marcus Millichap 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 Residential with a short position of Marcus Millichap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexpoint Residential and Marcus Millichap.
Diversification Opportunities for Nexpoint Residential and Marcus Millichap
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nexpoint and Marcus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Nexpoint Residential Trust and Marcus Millichap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus Millichap and Nexpoint Residential 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 Residential Trust are associated (or correlated) with Marcus Millichap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus Millichap has no effect on the direction of Nexpoint Residential i.e., Nexpoint Residential and Marcus Millichap go up and down completely randomly.
Pair Corralation between Nexpoint Residential and Marcus Millichap
Given the investment horizon of 90 days Nexpoint Residential Trust is expected to generate 0.81 times more return on investment than Marcus Millichap. However, Nexpoint Residential Trust is 1.23 times less risky than Marcus Millichap. It trades about 0.02 of its potential returns per unit of risk. Marcus Millichap is currently generating about -0.03 per unit of risk. If you would invest 3,116 in Nexpoint Residential Trust on August 18, 2025 and sell it today you would earn a total of 40.00 from holding Nexpoint Residential Trust or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexpoint Residential Trust vs. Marcus Millichap
Performance |
| Timeline |
| Nexpoint Residential |
| Marcus Millichap |
Nexpoint Residential and Marcus Millichap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexpoint Residential and Marcus Millichap
The main advantage of trading using opposite Nexpoint Residential and Marcus Millichap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexpoint Residential position performs unexpectedly, Marcus Millichap 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 Marcus Millichap will offset losses from the drop in Marcus Millichap's long position.| Nexpoint Residential vs. Saul Centers | Nexpoint Residential vs. Redwood Trust | Nexpoint Residential vs. AG Mortgage Investment | Nexpoint Residential vs. AG Mortgage Investment |
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Check out your portfolio center.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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