Correlation Between Meiwu Technology and Nextplat Corp

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

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

Diversification Opportunities for Meiwu Technology and Nextplat Corp

-0.14

Correlation Coefficient

Meiwu Technology  Nextplat Corp

Good diversification

The 3 months correlation between Meiwu and Nextplat is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp and Meiwu Technology 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 Meiwu Technology Co 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 Meiwu Technology i.e., Meiwu Technology and Nextplat Corp go up and down completely randomly.

Pair Corralation between Meiwu Technology and Nextplat Corp

Considering the 90-day investment horizon Meiwu Technology Co is expected to generate 0.86 times more return on investment than Nextplat Corp. However, Meiwu Technology Co is 1.17 times less risky than Nextplat Corp. It trades about 0.09 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.11 per unit of risk. If you would invest  82.00  in Meiwu Technology Co on September 2, 2024 and sell it today you would earn a total of  16.00  from holding Meiwu Technology Co or generate 19.51% return on investment over 90 days.

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

Meiwu Technology Co  vs.  Nextplat Corp

Meiwu Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

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. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Meiwu Technology and Nextplat Corp

The main advantage of trading using opposite Meiwu Technology and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology 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 Meiwu Technology Co 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.