Correlation Between NextTrip and Cantaloupe

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

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

Diversification Opportunities for NextTrip and Cantaloupe

-0.23

Correlation Coefficient

NextTrip  Cantaloupe

Very good diversification

The 3 months correlation between NextTrip and Cantaloupe is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding NextTrip and Cantaloupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantaloupe and NextTrip 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 NextTrip are associated (or correlated) with Cantaloupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantaloupe has no effect on the direction of NextTrip i.e., NextTrip and Cantaloupe go up and down completely randomly.

Pair Corralation between NextTrip and Cantaloupe

Given the investment horizon of 90 days NextTrip is expected to generate 2.53 times more return on investment than Cantaloupe. However, NextTrip is 2.53 times more volatile than Cantaloupe. It trades about 0.02 of its potential returns per unit of risk. Cantaloupe is currently generating about -0.11 per unit of risk. If you would invest  603.00  in NextTrip on December 31, 2024 and sell it today you would lose (50.00) from holding NextTrip or give up 8.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NextTrip  vs.  Cantaloupe

NextTrip

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NextTrip are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, NextTrip may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Cantaloupe

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cantaloupe has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with NextTrip and Cantaloupe

The main advantage of trading using opposite NextTrip and Cantaloupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextTrip position performs unexpectedly, Cantaloupe 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 Cantaloupe will offset losses from the drop in Cantaloupe's long position.

The idea behind NextTrip and Cantaloupe 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.