Correlation Between Adcore and NextPlat Corp

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

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

Diversification Opportunities for Adcore and NextPlat Corp

0.57

Correlation Coefficient

Adcore  NextPlat Corp

Very weak diversification

The 3 months correlation between Adcore and NextPlat is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Adcore Inc and NextPlat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlat Corp and Adcore 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 Adcore Inc 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 Adcore i.e., Adcore and NextPlat Corp go up and down completely randomly.

Pair Corralation between Adcore and NextPlat Corp

Assuming the 90 days horizon Adcore Inc is expected to under-perform the NextPlat Corp. But the otc stock apears to be less risky and, when comparing its historical volatility, Adcore Inc is 21.75 times less risky than NextPlat Corp. The otc stock trades about 0.0 of its potential returns per unit of risk. The NextPlat Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  39.00  in NextPlat Corp on October 12, 2024 and sell it today you would lose (19.00) from holding NextPlat Corp or give up 48.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	80.0%
Values	Daily Returns

Adcore Inc  vs.  NextPlat Corp

Adcore Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Adcore Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Adcore may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NextPlat Corp

Risk-Adjusted Performance

6 of 100

Modest

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. In spite of fairly conflicting essential indicators, NextPlat Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adcore and NextPlat Corp

The main advantage of trading using opposite Adcore and NextPlat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adcore 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 Adcore Inc 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.