Correlation Between Acm Research and Nextplat Corp

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Can any of the company-specific risk be diversified away by investing in both Acm Research and Nextplat Corp 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 Acm Research and Nextplat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acm Research and Nextplat Corp, you can compare the effects of market volatilities on Acm Research and Nextplat Corp 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 Acm Research with a short position of Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acm Research and Nextplat Corp.

Diversification Opportunities for Acm Research and Nextplat Corp

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Acm and Nextplat is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Acm Research and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp and Acm Research 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 Acm Research are associated (or correlated) with Nextplat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplat Corp has no effect on the direction of Acm Research i.e., Acm Research and Nextplat Corp go up and down completely randomly.

Pair Corralation between Acm Research and Nextplat Corp

Given the investment horizon of 90 days Acm Research is expected to generate 1.98 times more return on investment than Nextplat Corp. However, Acm Research is 1.98 times more volatile than Nextplat Corp. It trades about 0.37 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.12 per unit of risk. If you would invest  1,690  in Acm Research on November 29, 2024 and sell it today you would earn a total of  1,079  from holding Acm Research or generate 63.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Acm Research  vs.  Nextplat Corp

 Performance 
       Timeline  
Acm Research 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Acm Research are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Acm Research reported solid returns over the last few months and may actually be approaching a breakup point.
Nextplat Corp 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nextplat Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Nextplat Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Acm Research and Nextplat Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Acm Research and Nextplat Corp

The main advantage of trading using opposite Acm Research and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acm Research position performs unexpectedly, Nextplat Corp 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 Nextplat Corp will offset losses from the drop in Nextplat Corp's long position.
The idea behind Acm Research and Nextplat Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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