Correlation Between NextPlat Corp and Rumble

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

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

Diversification Opportunities for NextPlat Corp and Rumble

-0.71

Correlation Coefficient

NextPlat Corp  Rumble

Pay attention - limited upside

The 3 months correlation between NextPlat and Rumble is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding NextPlat Corp and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble Inc 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 Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of NextPlat Corp i.e., NextPlat Corp and Rumble go up and down completely randomly.

Pair Corralation between NextPlat Corp and Rumble

Assuming the 90 days horizon NextPlat Corp is expected to generate 14.98 times more return on investment than Rumble. However, NextPlat Corp is 14.98 times more volatile than Rumble Inc. It trades about 0.11 of its potential returns per unit of risk. Rumble Inc is currently generating about 0.07 per unit of risk. If you would invest  40.00  in NextPlat Corp on October 5, 2024 and sell it today you would lose (29.20) from holding NextPlat Corp or give up 73.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.26%
Values	Daily Returns

NextPlat Corp  vs.  Rumble Inc

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 fragile essential indicators, NextPlat Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Rumble Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rumble Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Rumble displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NextPlat Corp and Rumble

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

The idea behind NextPlat Corp and Rumble Inc 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.