Correlation Between Gap, and Nextplat Corp
Can any of the company-specific risk be diversified away by investing in both Gap, 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 Gap, and Nextplat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap, and Nextplat Corp, you can compare the effects of market volatilities on Gap, 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 Gap, with a short position of Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and Nextplat Corp.
Diversification Opportunities for Gap, and Nextplat Corp
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gap, and Nextplat is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp and Gap, 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 The Gap, 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 Gap, i.e., Gap, and Nextplat Corp go up and down completely randomly.
Pair Corralation between Gap, and Nextplat Corp
Considering the 90-day investment horizon The Gap, is expected to generate 0.47 times more return on investment than Nextplat Corp. However, The Gap, is 2.11 times less risky than Nextplat Corp. It trades about 0.22 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.18 per unit of risk. If you would invest 2,077 in The Gap, on September 1, 2024 and sell it today you would earn a total of 348.00 from holding The Gap, or generate 16.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gap, vs. Nextplat Corp
Performance |
| Timeline |
| Gap, |
| Nextplat Corp |
Gap, and Nextplat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap, and Nextplat Corp
The main advantage of trading using opposite Gap, and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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 The Gap, 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.| Nextplat Corp vs. Ke Holdings | Nextplat Corp vs. nCino Inc | Nextplat Corp vs. Kingsoft Cloud Holdings | Nextplat Corp vs. Jfrog |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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