Correlation Between NextPlat Corp and LiveChat Software
Can any of the company-specific risk be diversified away by investing in both NextPlat Corp and LiveChat 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 LiveChat 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 LiveChat Software SA, you can compare the effects of market volatilities on NextPlat Corp and LiveChat 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 LiveChat Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextPlat Corp and LiveChat Software.
Diversification Opportunities for NextPlat Corp and LiveChat Software
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NextPlat and LiveChat is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding NextPlat Corp and LiveChat Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiveChat 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 LiveChat Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveChat Software has no effect on the direction of NextPlat Corp i.e., NextPlat Corp and LiveChat Software go up and down completely randomly.
Pair Corralation between NextPlat Corp and LiveChat Software
Assuming the 90 days horizon NextPlat Corp is expected to generate 37.31 times more return on investment than LiveChat Software. However, NextPlat Corp is 37.31 times more volatile than LiveChat Software SA. It trades about 0.09 of its potential returns per unit of risk. LiveChat Software SA is currently generating about 0.0 per unit of risk. If you would invest 62.00 in NextPlat Corp on September 26, 2024 and sell it today you would lose (50.00) from holding NextPlat Corp or give up 80.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 78.43% |
Values | Daily Returns |
NextPlat Corp vs. LiveChat Software SA
Performance |
Timeline |
NextPlat Corp |
LiveChat Software |
NextPlat Corp and LiveChat Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NextPlat Corp and LiveChat Software
The main advantage of trading using opposite NextPlat Corp and LiveChat Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextPlat Corp position performs unexpectedly, LiveChat 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 LiveChat Software will offset losses from the drop in LiveChat Software's long position.The idea behind NextPlat Corp and LiveChat Software SA 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.LiveChat Software vs. NextPlat Corp | LiveChat Software vs. Liquid Avatar Technologies | LiveChat Software vs. Waldencast Acquisition Corp | LiveChat Software vs. CXApp Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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