Correlation Between Nextracker and Aveanna Healthcare

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

By analyzing existing cross correlation between Nextracker Class A and Aveanna Healthcare Holdings, you can compare the effects of market volatilities on Nextracker and Aveanna Healthcare 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 Nextracker with a short position of Aveanna Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextracker and Aveanna Healthcare.

Diversification Opportunities for Nextracker and Aveanna Healthcare

-0.29

Correlation Coefficient

Nextracker  Aveanna Healthcare

Very good diversification

The 3 months correlation between Nextracker and Aveanna is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nextracker Class A and Aveanna Healthcare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveanna Healthcare and Nextracker 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 Nextracker Class A are associated (or correlated) with Aveanna Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveanna Healthcare has no effect on the direction of Nextracker i.e., Nextracker and Aveanna Healthcare go up and down completely randomly.

Pair Corralation between Nextracker and Aveanna Healthcare

Considering the 90-day investment horizon Nextracker Class A is expected to generate 1.01 times more return on investment than Aveanna Healthcare. However, Nextracker is 1.01 times more volatile than Aveanna Healthcare Holdings. It trades about 0.13 of its potential returns per unit of risk. Aveanna Healthcare Holdings is currently generating about -0.09 per unit of risk. If you would invest  4,377  in Nextracker Class A on May 7, 2025 and sell it today you would earn a total of  1,254  from holding Nextracker Class A or generate 28.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nextracker Class A  vs.  Aveanna Healthcare Holdings

Nextracker Class A

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nextracker Class A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Nextracker unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aveanna Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aveanna Healthcare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Nextracker and Aveanna Healthcare

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

The idea behind Nextracker Class A and Aveanna Healthcare Holdings 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.