Correlation Between NextPlat Corp and Dubber

Can any of the company-specific risk be diversified away by investing in both NextPlat Corp and Dubber 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 Dubber into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NextPlat Corp and Dubber Limited, you can compare the effects of market volatilities on NextPlat Corp and Dubber 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 Dubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextPlat Corp and Dubber.

Diversification Opportunities for NextPlat Corp and Dubber

-0.11

Correlation Coefficient

NextPlat Corp  Dubber

Good diversification

The 3 months correlation between NextPlat and Dubber is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NextPlat Corp and Dubber Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dubber Limited 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 Dubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dubber Limited has no effect on the direction of NextPlat Corp i.e., NextPlat Corp and Dubber go up and down completely randomly.

Pair Corralation between NextPlat Corp and Dubber

Assuming the 90 days horizon NextPlat Corp is expected to generate 7.9 times more return on investment than Dubber. However, NextPlat Corp is 7.9 times more volatile than Dubber Limited. It trades about 0.1 of its potential returns per unit of risk. Dubber Limited is currently generating about -0.22 per unit of risk. If you would invest  11.00  in NextPlat Corp on October 1, 2024 and sell it today you would lose (2.00) from holding NextPlat Corp or give up 18.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

NextPlat Corp  vs.  Dubber Limited

NextPlat Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NextPlat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, NextPlat Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Dubber Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dubber Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Dubber reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NextPlat Corp and Dubber

The main advantage of trading using opposite NextPlat Corp and Dubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextPlat Corp position performs unexpectedly, Dubber 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 Dubber will offset losses from the drop in Dubber's long position.

The idea behind NextPlat Corp and Dubber Limited 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.