Correlation Between Nextplay Technologies and Bridgeline Digital

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

By analyzing existing cross correlation between Nextplay Technologies and Bridgeline Digital, you can compare the effects of market volatilities on Nextplay Technologies and Bridgeline Digital 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 Nextplay Technologies with a short position of Bridgeline Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplay Technologies and Bridgeline Digital.

Diversification Opportunities for Nextplay Technologies and Bridgeline Digital

-0.68

Correlation Coefficient

Nextplay Technologies  Bridgeline Digital

Excellent diversification

The 3 months correlation between Nextplay and Bridgeline is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nextplay Technologies and Bridgeline Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgeline Digital and Nextplay 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 Nextplay Technologies are associated (or correlated) with Bridgeline Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgeline Digital has no effect on the direction of Nextplay Technologies i.e., Nextplay Technologies and Bridgeline Digital go up and down completely randomly.

Pair Corralation between Nextplay Technologies and Bridgeline Digital

If you would invest  100.00  in Bridgeline Digital on September 1, 2024 and sell it today you would earn a total of  16.00  from holding Bridgeline Digital or generate 16.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Nextplay Technologies  vs.  Bridgeline Digital

Nextplay Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextplay Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nextplay Technologies is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Bridgeline Digital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgeline Digital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Bridgeline Digital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nextplay Technologies and Bridgeline Digital

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

The idea behind Nextplay Technologies and Bridgeline Digital 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.