Correlation Between Nextplat Corp and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp and Westrock Coffee 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 Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and Westrock Coffee, you can compare the effects of market volatilities on Nextplat Corp and Westrock Coffee 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 Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and Westrock Coffee.
Diversification Opportunities for Nextplat Corp and Westrock Coffee
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nextplat and Westrock is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee 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 Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Westrock Coffee go up and down completely randomly.
Pair Corralation between Nextplat Corp and Westrock Coffee
Given the investment horizon of 90 days Nextplat Corp is expected to generate 1.39 times more return on investment than Westrock Coffee. However, Nextplat Corp is 1.39 times more volatile than Westrock Coffee. It trades about -0.16 of its potential returns per unit of risk. Westrock Coffee is currently generating about -0.27 per unit of risk. If you would invest 110.00 in Nextplat Corp on November 28, 2024 and sell it today you would lose (13.46) from holding Nextplat Corp or give up 12.24% 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. Westrock Coffee
Performance |
| Timeline |
| Nextplat Corp |
| Westrock Coffee |
Nextplat Corp and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextplat Corp and Westrock Coffee
The main advantage of trading using opposite Nextplat Corp and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp position performs unexpectedly, Westrock Coffee 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 Westrock Coffee will offset losses from the drop in Westrock Coffee's long position.| Nextplat Corp vs. RenoWorks Software | Nextplat Corp vs. LifeSpeak | Nextplat Corp vs. 01 Communique Laboratory | Nextplat Corp vs. Where Food Comes |
| Westrock Coffee vs. Coffee Holding Co | Westrock Coffee vs. Bridgford Foods | Westrock Coffee vs. John B Sanfilippo | Westrock Coffee vs. Treehouse Foods |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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