Correlation Between NextPlat Corp and Two Hands

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

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

Diversification Opportunities for NextPlat Corp and Two Hands

0.3

Correlation Coefficient

NextPlat Corp  Two Hands

Weak diversification

The 3 months correlation between NextPlat and Two is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NextPlat Corp and Two Hands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Two Hands Corp 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 Two Hands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Two Hands Corp has no effect on the direction of NextPlat Corp i.e., NextPlat Corp and Two Hands go up and down completely randomly.

Pair Corralation between NextPlat Corp and Two Hands

Assuming the 90 days horizon NextPlat Corp is expected to under-perform the Two Hands. But the stock apears to be less risky and, when comparing its historical volatility, NextPlat Corp is 18.35 times less risky than Two Hands. The stock trades about -0.03 of its potential returns per unit of risk. The Two Hands Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Two Hands Corp on September 22, 2024 and sell it today you would earn a total of  0.01  from holding Two Hands Corp or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	79.69%
Values	Daily Returns

NextPlat Corp  vs.  Two Hands Corp

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 abnormal performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Two Hands Corp

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Two Hands Corp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Two Hands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NextPlat Corp and Two Hands

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

The idea behind NextPlat Corp and Two Hands Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.