Correlation Between Auddia and NextPlat Corp

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

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

Diversification Opportunities for Auddia and NextPlat Corp

0.2

Correlation Coefficient

Auddia  NextPlat Corp

Modest diversification

The 3 months correlation between Auddia and NextPlat is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Auddia Inc and NextPlat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlat Corp and Auddia 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 Auddia 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 Auddia i.e., Auddia and NextPlat Corp go up and down completely randomly.

Pair Corralation between Auddia and NextPlat Corp

Assuming the 90 days horizon Auddia Inc is expected to under-perform the NextPlat Corp. But the stock apears to be less risky and, when comparing its historical volatility, Auddia Inc is 2.0 times less risky than NextPlat Corp. The stock trades about -0.1 of its potential returns per unit of risk. The NextPlat Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  20.00  in NextPlat Corp on September 25, 2024 and sell it today you would lose (8.00) from holding NextPlat Corp or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.33%
Values	Daily Returns

Auddia Inc  vs.  NextPlat Corp

Auddia Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Auddia Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Auddia showed solid returns over the last few months and may actually be approaching a breakup point.

NextPlat Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NextPlat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Auddia and NextPlat Corp

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

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.