Correlation Between Nextplat Corp and Ke Holdings

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

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

Diversification Opportunities for Nextplat Corp and Ke Holdings

-0.63

Correlation Coefficient

Nextplat Corp  Ke Holdings

Excellent diversification

The 3 months correlation between Nextplat and BEKE is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and Ke Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ke Holdings and Nextplat Corp 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 Nextplat Corp are associated (or correlated) with Ke Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ke Holdings has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Ke Holdings go up and down completely randomly.

Pair Corralation between Nextplat Corp and Ke Holdings

Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the Ke Holdings. In addition to that, Nextplat Corp is 2.68 times more volatile than Ke Holdings. It trades about 0.0 of its total potential returns per unit of risk. Ke Holdings is currently generating about 0.07 per unit of volatility. If you would invest  1,843  in Ke Holdings on December 28, 2024 and sell it today you would earn a total of  216.00  from holding Ke Holdings or generate 11.72% return on investment over 90 days.

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

Nextplat Corp  vs.  Ke Holdings

Nextplat Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nextplat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Nextplat Corp is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Ke Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ke Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward-looking signals, Ke Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nextplat Corp and Ke Holdings

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

The idea behind Nextplat Corp and Ke Holdings 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.