Correlation Between Nextplat Corp and Wendys
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp and Wendys 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 Wendys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and The Wendys Co, you can compare the effects of market volatilities on Nextplat Corp and Wendys 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 Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and Wendys.
Diversification Opportunities for Nextplat Corp and Wendys
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nextplat and Wendys is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Wendys go up and down completely randomly.
Pair Corralation between Nextplat Corp and Wendys
Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the Wendys. In addition to that, Nextplat Corp is 3.41 times more volatile than The Wendys Co. It trades about -0.14 of its total potential returns per unit of risk. The Wendys Co is currently generating about -0.18 per unit of volatility. If you would invest 2,028 in The Wendys Co on August 30, 2024 and sell it today you would lose (175.00) from holding The Wendys Co or give up 8.63% 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. The Wendys Co
Performance |
| Timeline |
| Nextplat Corp |
| The Wendys |
Nextplat Corp and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextplat Corp and Wendys
The main advantage of trading using opposite Nextplat Corp and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| Nextplat Corp vs. RenoWorks Software | Nextplat Corp vs. LifeSpeak | Nextplat Corp vs. 01 Communique Laboratory | Nextplat Corp vs. Where Food Comes |
| Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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