Correlation Between WonderFi Technologies and NextPlat Corp
Can any of the company-specific risk be diversified away by investing in both WonderFi Technologies and NextPlat Corp 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 WonderFi Technologies and NextPlat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WonderFi Technologies and NextPlat Corp, you can compare the effects of market volatilities on WonderFi Technologies and NextPlat Corp 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 WonderFi Technologies with a short position of NextPlat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of WonderFi Technologies and NextPlat Corp.
Diversification Opportunities for WonderFi Technologies and NextPlat Corp
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WonderFi and NextPlat is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding WonderFi Technologies and NextPlat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlat Corp and WonderFi Technologies 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 WonderFi Technologies are associated (or correlated) with NextPlat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextPlat Corp has no effect on the direction of WonderFi Technologies i.e., WonderFi Technologies and NextPlat Corp go up and down completely randomly.
Pair Corralation between WonderFi Technologies and NextPlat Corp
Assuming the 90 days horizon WonderFi Technologies is expected to generate 1.52 times more return on investment than NextPlat Corp. However, WonderFi Technologies is 1.52 times more volatile than NextPlat Corp. It trades about 0.27 of its potential returns per unit of risk. NextPlat Corp is currently generating about 0.11 per unit of risk. If you would invest 12.00 in WonderFi Technologies on September 2, 2024 and sell it today you would earn a total of 5.00 from holding WonderFi Technologies or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
WonderFi Technologies vs. NextPlat Corp
Performance |
| Timeline |
| WonderFi Technologies |
| NextPlat Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WonderFi Technologies and NextPlat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WonderFi Technologies and NextPlat Corp
The main advantage of trading using opposite WonderFi Technologies and NextPlat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WonderFi Technologies position performs unexpectedly, NextPlat Corp 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 NextPlat Corp will offset losses from the drop in NextPlat Corp's long position.| WonderFi Technologies vs. Waldencast Acquisition Corp | WonderFi Technologies vs. Alkami Technology | WonderFi Technologies vs. ADEIA P | WonderFi Technologies vs. Paycor HCM |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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