Correlation Between Nextplat Corp and Imax Corp

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

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

Diversification Opportunities for Nextplat Corp and Imax Corp

0.63

Correlation Coefficient

Nextplat Corp  Imax Corp

Poor diversification

The 3 months correlation between Nextplat and Imax is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax 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 Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and Imax Corp go up and down completely randomly.

Pair Corralation between Nextplat Corp and Imax Corp

Given the investment horizon of 90 days Nextplat Corp is expected to generate 2.63 times more return on investment than Imax Corp. However, Nextplat Corp is 2.63 times more volatile than Imax Corp. It trades about 0.11 of its potential returns per unit of risk. Imax Corp is currently generating about 0.07 per unit of risk. If you would invest  55.00  in Nextplat Corp on May 1, 2025 and sell it today you would earn a total of  16.00  from holding Nextplat Corp or generate 29.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Nextplat Corp  vs.  Imax Corp

Nextplat Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nextplat Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Nextplat Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Imax Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Imax Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Imax Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Nextplat Corp and Imax Corp

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

The idea behind Nextplat Corp and Imax 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.