Correlation Between QUEEN S and Newtek Business

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

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

Diversification Opportunities for QUEEN S and Newtek Business

0.34

Correlation Coefficient

QUEEN S  Newtek Business

Weak diversification

The 3 months correlation between QUEEN and Newtek is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and Newtek Business Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newtek Business Services and QUEEN S 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 QUEEN S ROAD are associated (or correlated) with Newtek Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newtek Business Services has no effect on the direction of QUEEN S i.e., QUEEN S and Newtek Business go up and down completely randomly.

Pair Corralation between QUEEN S and Newtek Business

Assuming the 90 days horizon QUEEN S ROAD is expected to generate 1.42 times more return on investment than Newtek Business. However, QUEEN S is 1.42 times more volatile than Newtek Business Services. It trades about 0.02 of its potential returns per unit of risk. Newtek Business Services is currently generating about 0.01 per unit of risk. If you would invest  45.00  in QUEEN S ROAD on September 28, 2024 and sell it today you would earn a total of  1.00  from holding QUEEN S ROAD or generate 2.22% return on investment over 90 days.

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

QUEEN S ROAD  vs.  Newtek Business Services

QUEEN S ROAD

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QUEEN S ROAD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QUEEN S may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Newtek Business Services

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Newtek Business Services are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Newtek Business reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QUEEN S and Newtek Business

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

The idea behind QUEEN S ROAD and Newtek Business Services 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..