Correlation Between Nextplat Corp and Sea
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp and Sea 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 Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and Sea, you can compare the effects of market volatilities on Nextplat Corp and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and Sea.
Diversification Opportunities for Nextplat Corp and Sea
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nextplat and Sea is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Sea go up and down completely randomly.
Pair Corralation between Nextplat Corp and Sea
Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the Sea. In addition to that, Nextplat Corp is 2.45 times more volatile than Sea. It trades about -0.18 of its total potential returns per unit of risk. Sea is currently generating about 0.31 per unit of volatility. If you would invest 9,405 in Sea on September 1, 2024 and sell it today you would earn a total of 1,975 from holding Sea or generate 21.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextplat Corp vs. Sea
Performance |
| Timeline |
| Nextplat Corp |
| Sea |
Nextplat Corp and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextplat Corp and Sea
The main advantage of trading using opposite Nextplat Corp and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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