Correlation Between Nextplat Corp and Embark Technology

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

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

Diversification Opportunities for Nextplat Corp and Embark Technology

-0.29

Correlation Coefficient

Nextplat Corp  Embark Technology

Very good diversification

The 3 months correlation between Nextplat and Embark is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and Embark Technology Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Technology 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 Embark Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Technology has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Embark Technology go up and down completely randomly.

Pair Corralation between Nextplat Corp and Embark Technology

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

Nextplat Corp  vs.  Embark Technology Warrants

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.

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.

Pair Trading with Nextplat Corp and Embark Technology

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

The idea behind Nextplat Corp and Embark Technology Warrants 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.