Correlation Between Nextplat Corp and WiMi Hologram
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp and WiMi Hologram 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 WiMi Hologram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and WiMi Hologram Cloud, you can compare the effects of market volatilities on Nextplat Corp and WiMi Hologram 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 WiMi Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and WiMi Hologram.
Diversification Opportunities for Nextplat Corp and WiMi Hologram
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nextplat and WiMi is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and WiMi Hologram Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiMi Hologram Cloud 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 WiMi Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiMi Hologram Cloud has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and WiMi Hologram go up and down completely randomly.
Pair Corralation between Nextplat Corp and WiMi Hologram
Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the WiMi Hologram. But the stock apears to be less risky and, when comparing its historical volatility, Nextplat Corp is 2.0 times less risky than WiMi Hologram. The stock trades about -0.02 of its potential returns per unit of risk. The WiMi Hologram Cloud is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 64.00 in WiMi Hologram Cloud on August 28, 2024 and sell it today you would earn a total of 21.00 from holding WiMi Hologram Cloud or generate 32.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextplat Corp vs. WiMi Hologram Cloud
Performance |
| Timeline |
| Nextplat Corp |
| WiMi Hologram Cloud |
Nextplat Corp and WiMi Hologram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextplat Corp and WiMi Hologram
The main advantage of trading using opposite Nextplat Corp and WiMi Hologram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp position performs unexpectedly, WiMi Hologram 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 WiMi Hologram will offset losses from the drop in WiMi Hologram's long position.The idea behind Nextplat Corp and WiMi Hologram Cloud pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| WiMi Hologram vs. ADTRAN Inc | WiMi Hologram vs. Belden Inc | WiMi Hologram vs. ADC Therapeutics SA | WiMi Hologram vs. Comtech Telecommunications Corp |
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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