Correlation Between Embark Technology and Nextplat Corp

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

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

Diversification Opportunities for Embark Technology and Nextplat Corp

-0.29

Correlation Coefficient

Embark Technology  Nextplat Corp

Very good diversification

The 3 months correlation between Embark and Nextplat is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Embark Technology Warrants and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp and Embark Technology 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 Embark Technology Warrants 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 Embark Technology i.e., Embark Technology and Nextplat Corp go up and down completely randomly.

Pair Corralation between Embark Technology and Nextplat Corp

If you would invest  115.00  in Nextplat Corp on October 22, 2024 and sell it today you would lose (4.00) from holding Nextplat Corp or give up 3.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Embark Technology Warrants  vs.  Nextplat Corp

Embark Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Embark Technology Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward-looking signals, Embark Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nextplat Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nextplat Corp are ranked lower than 4 (%) 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.

Pair Trading with Embark Technology and Nextplat Corp

The main advantage of trading using opposite Embark Technology and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embark Technology 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 Embark Technology Warrants 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.