Correlation Between NextPlay Technologies and Carnival

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

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

Diversification Opportunities for NextPlay Technologies and Carnival

0.0

Correlation Coefficient

NextPlay Technologies  Carnival

Pay attention - limited upside

The 3 months correlation between NextPlay and Carnival is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NextPlay Technologies and Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival 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 Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival has no effect on the direction of NextPlay Technologies i.e., NextPlay Technologies and Carnival go up and down completely randomly.

Pair Corralation between NextPlay Technologies and Carnival

If you would invest (100.00) in NextPlay Technologies on January 20, 2024 and sell it today you would earn a total of  100.00  from holding NextPlay Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NextPlay Technologies  vs.  Carnival

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. Despite fairly strong technical and fundamental indicators, NextPlay Technologies is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Carnival

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carnival has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with NextPlay Technologies and Carnival

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

The idea behind NextPlay Technologies and Carnival 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.