Correlation Between Nextplat Corp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp and Dow Jones 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 Nextplat Corp and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Nextplat Corp and Dow Jones 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 Nextplat Corp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and Dow Jones.
Diversification Opportunities for Nextplat Corp and Dow Jones
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nextplat and Dow is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Nextplat Corp 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 Nextplat Corp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Dow Jones go up and down completely randomly.
Pair Corralation between Nextplat Corp and Dow Jones
Given the investment horizon of 90 days Nextplat Corp is expected to generate 20.51 times more return on investment than Dow Jones. However, Nextplat Corp is 20.51 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of risk. If you would invest 115.00 in Nextplat Corp on October 20, 2024 and sell it today you would lose (4.00) from holding Nextplat Corp or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nextplat Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Nextplat Corp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Nextplat Corp
Pair trading matchups for Nextplat Corp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Nextplat Corp and Dow Jones
The main advantage of trading using opposite Nextplat Corp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Nextplat Corp vs. RenoWorks Software | Nextplat Corp vs. LifeSpeak | Nextplat Corp vs. 01 Communique Laboratory | Nextplat Corp vs. Where Food Comes |
| Dow Jones vs. SkyWest | Dow Jones vs. Air Transport Services | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Emerson Radio |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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