Correlation Between NextPlat Corp and Boardwalktech Software

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

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

Diversification Opportunities for NextPlat Corp and Boardwalktech Software

0.33

Correlation Coefficient

NextPlat Corp  Boardwalktech Software

Weak diversification

The 3 months correlation between NextPlat and Boardwalktech is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NextPlat Corp and Boardwalktech Software Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boardwalktech Software 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 Boardwalktech Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boardwalktech Software has no effect on the direction of NextPlat Corp i.e., NextPlat Corp and Boardwalktech Software go up and down completely randomly.

Pair Corralation between NextPlat Corp and Boardwalktech Software

Assuming the 90 days horizon NextPlat Corp is expected to generate 2.4 times more return on investment than Boardwalktech Software. However, NextPlat Corp is 2.4 times more volatile than Boardwalktech Software Corp. It trades about 0.01 of its potential returns per unit of risk. Boardwalktech Software Corp is currently generating about -0.05 per unit of risk. If you would invest  19.00  in NextPlat Corp on October 1, 2024 and sell it today you would lose (10.00) from holding NextPlat Corp or give up 52.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	70.73%
Values	Daily Returns

NextPlat Corp  vs.  Boardwalktech Software Corp

NextPlat Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NextPlat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, NextPlat Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Boardwalktech Software

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boardwalktech Software Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal forward-looking signals, Boardwalktech Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NextPlat Corp and Boardwalktech Software

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

The idea behind NextPlat Corp and Boardwalktech Software Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.