Correlation Between Where Food and Nextplat Corp

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

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

Diversification Opportunities for Where Food and Nextplat Corp

0.51

Correlation Coefficient

Where Food  Nextplat Corp

Very weak diversification

The 3 months correlation between Where and Nextplat is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp and Where Food 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 Where Food Comes 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 Where Food i.e., Where Food and Nextplat Corp go up and down completely randomly.

Pair Corralation between Where Food and Nextplat Corp

Given the investment horizon of 90 days Where Food Comes is expected to under-perform the Nextplat Corp. But the stock apears to be less risky and, when comparing its historical volatility, Where Food Comes is 3.45 times less risky than Nextplat Corp. The stock trades about -0.05 of its potential returns per unit of risk. The Nextplat Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  109.00  in Nextplat Corp on December 29, 2024 and sell it today you would lose (24.00) from holding Nextplat Corp or give up 22.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Where Food Comes  vs.  Nextplat Corp

Where Food Comes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Where Food Comes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Nextplat Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nextplat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Nextplat Corp is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Where Food and Nextplat Corp

The main advantage of trading using opposite Where Food and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Where Food 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 Where Food Comes 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.