Correlation Between Kontoor Brands and Nextplat Corp
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands 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 Kontoor Brands and Nextplat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Nextplat Corp, you can compare the effects of market volatilities on Kontoor Brands 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 Kontoor Brands with a short position of Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Nextplat Corp.
Diversification Opportunities for Kontoor Brands and Nextplat Corp
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kontoor and Nextplat is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp and Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and Nextplat Corp go up and down completely randomly.
Pair Corralation between Kontoor Brands and Nextplat Corp
Considering the 90-day investment horizon Kontoor Brands is expected to generate 0.42 times more return on investment than Nextplat Corp. However, Kontoor Brands is 2.36 times less risky than Nextplat Corp. It trades about 0.2 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.08 per unit of risk. If you would invest 7,752 in Kontoor Brands on August 24, 2024 and sell it today you would earn a total of 1,033 from holding Kontoor Brands or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. Nextplat Corp
Performance |
| Timeline |
| Kontoor Brands |
| Nextplat Corp |
Kontoor Brands and Nextplat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Nextplat Corp
The main advantage of trading using opposite Kontoor Brands and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands 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.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| Nextplat Corp vs. RenoWorks Software | Nextplat Corp vs. LifeSpeak | Nextplat Corp vs. 01 Communique Laboratory | Nextplat Corp vs. Where Food Comes |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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