Correlation Between Newtek Business and NewtekOne, 800

Can any of the company-specific risk be diversified away by investing in both Newtek Business and NewtekOne, 800 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 Newtek Business and NewtekOne, 800 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Newtek Business Services and NewtekOne, 800 percent, you can compare the effects of market volatilities on Newtek Business and NewtekOne, 800 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 Newtek Business with a short position of NewtekOne, 800. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newtek Business and NewtekOne, 800.

Diversification Opportunities for Newtek Business and NewtekOne, 800

0.84

Correlation Coefficient

Newtek Business  NewtekOne, 800

Very poor diversification

The 3 months correlation between Newtek and NewtekOne, is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Newtek Business Services and NewtekOne, 800 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewtekOne, 800 percent and Newtek Business 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 Newtek Business Services are associated (or correlated) with NewtekOne, 800. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewtekOne, 800 percent has no effect on the direction of Newtek Business i.e., Newtek Business and NewtekOne, 800 go up and down completely randomly.

Pair Corralation between Newtek Business and NewtekOne, 800

Assuming the 90 days horizon Newtek Business is expected to generate 1.27 times less return on investment than NewtekOne, 800. But when comparing it to its historical volatility, Newtek Business Services is 1.69 times less risky than NewtekOne, 800. It trades about 0.15 of its potential returns per unit of risk. NewtekOne, 800 percent is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,441  in NewtekOne, 800 percent on July 10, 2024 and sell it today you would earn a total of  81.00  from holding NewtekOne, 800 percent or generate 3.32% return on investment over 90 days.

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

Newtek Business Services  vs.  NewtekOne, 800 percent

Newtek Business Services

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Newtek Business Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Newtek Business is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

NewtekOne, 800 percent

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NewtekOne, 800 percent are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, NewtekOne, 800 is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Newtek Business and NewtekOne, 800

The main advantage of trading using opposite Newtek Business and NewtekOne, 800 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newtek Business position performs unexpectedly, NewtekOne, 800 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 NewtekOne, 800 will offset losses from the drop in NewtekOne, 800's long position.

The idea behind Newtek Business Services and NewtekOne, 800 percent 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.