Correlation Between Nextplat Corp and Hub Cyber

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

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

Diversification Opportunities for Nextplat Corp and Hub Cyber

-0.08

Correlation Coefficient

Nextplat Corp  Hub Cyber

Good diversification

The 3 months correlation between Nextplat and Hub is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and Hub Cyber Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Cyber Security 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 Hub Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Cyber Security has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Hub Cyber go up and down completely randomly.

Pair Corralation between Nextplat Corp and Hub Cyber

Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the Hub Cyber. But the stock apears to be less risky and, when comparing its historical volatility, Nextplat Corp is 2.93 times less risky than Hub Cyber. The stock trades about 0.0 of its potential returns per unit of risk. The Hub Cyber Security is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3.55  in Hub Cyber Security on December 29, 2024 and sell it today you would lose (1.19) from holding Hub Cyber Security or give up 33.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

Nextplat Corp  vs.  Hub Cyber Security

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.

Hub Cyber Security

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hub Cyber Security are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Hub Cyber showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nextplat Corp and Hub Cyber

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

The idea behind Nextplat Corp and Hub Cyber Security 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.