Correlation Between Ryvyl and Nextplay Technologies

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

By analyzing existing cross correlation between Ryvyl Inc and Nextplay Technologies, you can compare the effects of market volatilities on Ryvyl and Nextplay Technologies 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 Ryvyl with a short position of Nextplay Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryvyl and Nextplay Technologies.

Diversification Opportunities for Ryvyl and Nextplay Technologies

0.39

Correlation Coefficient

Ryvyl  Nextplay Technologies

Weak diversification

The 3 months correlation between Ryvyl and Nextplay is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ryvyl Inc and Nextplay Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplay Technologies and Ryvyl 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 Ryvyl Inc are associated (or correlated) with Nextplay Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplay Technologies has no effect on the direction of Ryvyl i.e., Ryvyl and Nextplay Technologies go up and down completely randomly.

Pair Corralation between Ryvyl and Nextplay Technologies

Given the investment horizon of 90 days Ryvyl Inc is expected to generate 1.21 times more return on investment than Nextplay Technologies. However, Ryvyl is 1.21 times more volatile than Nextplay Technologies. It trades about 0.02 of its potential returns per unit of risk. Nextplay Technologies is currently generating about -0.03 per unit of risk. If you would invest  490.00  in Ryvyl Inc on October 21, 2024 and sell it today you would lose (350.00) from holding Ryvyl Inc or give up 71.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	27.94%
Values	Daily Returns

Ryvyl Inc  vs.  Nextplay Technologies

Ryvyl Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryvyl Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Nextplay Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextplay Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nextplay Technologies is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ryvyl and Nextplay Technologies

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

The idea behind Ryvyl Inc and Nextplay Technologies 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.