Correlation Between Nextplat Corp and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp and BBB Foods 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 BBB Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and BBB Foods, you can compare the effects of market volatilities on Nextplat Corp and BBB Foods 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 BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and BBB Foods.
Diversification Opportunities for Nextplat Corp and BBB Foods
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nextplat and BBB is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and BBB Foods go up and down completely randomly.
Pair Corralation between Nextplat Corp and BBB Foods
Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the BBB Foods. In addition to that, Nextplat Corp is 2.28 times more volatile than BBB Foods. It trades about -0.12 of its total potential returns per unit of risk. BBB Foods is currently generating about -0.16 per unit of volatility. If you would invest 3,200 in BBB Foods on August 31, 2024 and sell it today you would lose (378.00) from holding BBB Foods or give up 11.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextplat Corp vs. BBB Foods
Performance |
| Timeline |
| Nextplat Corp |
| BBB Foods |
Nextplat Corp and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextplat Corp and BBB Foods
The main advantage of trading using opposite Nextplat Corp and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| Nextplat Corp vs. RenoWorks Software | Nextplat Corp vs. LifeSpeak | Nextplat Corp vs. 01 Communique Laboratory | Nextplat Corp vs. Where Food Comes |
| BBB Foods vs. Citizens Bancorp Investment | BBB Foods vs. Stepstone Group | BBB Foods vs. Independence Realty Trust | BBB Foods vs. Western Sierra Mining |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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