Correlation Between Nextplat Corp and Onity

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

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

Diversification Opportunities for Nextplat Corp and Onity

-0.17

Correlation Coefficient

Nextplat Corp  Onity

Good diversification

The 3 months correlation between Nextplat and Onity is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and Onity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onity Group 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 Onity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onity Group has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Onity go up and down completely randomly.

Pair Corralation between Nextplat Corp and Onity

Given the investment horizon of 90 days Nextplat Corp is expected to generate 4.48 times more return on investment than Onity. However, Nextplat Corp is 4.48 times more volatile than Onity Group. It trades about 0.08 of its potential returns per unit of risk. Onity Group is currently generating about 0.05 per unit of risk. If you would invest  79.00  in Nextplat Corp on November 28, 2024 and sell it today you would earn a total of  17.54  from holding Nextplat Corp or generate 22.2% return on investment over 90 days.

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

Nextplat Corp  vs.  Onity Group

Nextplat Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nextplat Corp are ranked lower than 6 (%) 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.

Onity Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Onity Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Onity may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Nextplat Corp and Onity

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

The idea behind Nextplat Corp and Onity Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.