Correlation Between Newtek Business and ADRIATIC METALS

Can any of the company-specific risk be diversified away by investing in both Newtek Business and ADRIATIC METALS 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 ADRIATIC METALS 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 ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on Newtek Business and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newtek Business and ADRIATIC METALS.

Diversification Opportunities for Newtek Business and ADRIATIC METALS

0.6

Correlation Coefficient

Newtek Business  ADRIATIC METALS

Poor diversification

The 3 months correlation between Newtek and ADRIATIC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Newtek Business Services and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of Newtek Business i.e., Newtek Business and ADRIATIC METALS go up and down completely randomly.

Pair Corralation between Newtek Business and ADRIATIC METALS

Assuming the 90 days trading horizon Newtek Business is expected to generate 3.43 times less return on investment than ADRIATIC METALS. But when comparing it to its historical volatility, Newtek Business Services is 1.42 times less risky than ADRIATIC METALS. It trades about 0.01 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  199.00  in ADRIATIC METALS LS 013355 on October 5, 2024 and sell it today you would earn a total of  21.00  from holding ADRIATIC METALS LS 013355 or generate 10.55% return on investment over 90 days.

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

Newtek Business Services  vs.  ADRIATIC METALS LS 013355

Newtek Business Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newtek Business Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Newtek Business is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ADRIATIC METALS LS

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days ADRIATIC METALS LS 013355 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, ADRIATIC METALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Newtek Business and ADRIATIC METALS

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

The idea behind Newtek Business Services and ADRIATIC METALS LS 013355 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.