Correlation Between SSC Technologies and NextPlat Corp

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

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

Diversification Opportunities for SSC Technologies and NextPlat Corp

0.29

Correlation Coefficient

SSC Technologies  NextPlat Corp

Modest diversification

The 3 months correlation between SSC and NextPlat is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings and NextPlat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlat Corp and SSC Technologies 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 SSC Technologies Holdings are associated (or correlated) with NextPlat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextPlat Corp has no effect on the direction of SSC Technologies i.e., SSC Technologies and NextPlat Corp go up and down completely randomly.

Pair Corralation between SSC Technologies and NextPlat Corp

Given the investment horizon of 90 days SSC Technologies is expected to generate 19.41 times less return on investment than NextPlat Corp. But when comparing it to its historical volatility, SSC Technologies Holdings is 21.4 times less risky than NextPlat Corp. It trades about 0.19 of its potential returns per unit of risk. NextPlat Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  11.00  in NextPlat Corp on November 29, 2024 and sell it today you would earn a total of  8.00  from holding NextPlat Corp or generate 72.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	84.75%
Values	Daily Returns

SSC Technologies Holdings  vs.  NextPlat Corp

SSC Technologies Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, SSC Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

NextPlat Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NextPlat Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, NextPlat Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Technologies and NextPlat Corp

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

The idea behind SSC Technologies Holdings and NextPlat 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.