Correlation Between JLT MOBILE and Newtek Business

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

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

Diversification Opportunities for JLT MOBILE and Newtek Business

0.24

Correlation Coefficient

JLT MOBILE  Newtek Business

Modest diversification

The 3 months correlation between JLT and Newtek is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding JLT MOBILE PUTER 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 JLT MOBILE 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 JLT MOBILE PUTER 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 JLT MOBILE i.e., JLT MOBILE and Newtek Business go up and down completely randomly.

Pair Corralation between JLT MOBILE and Newtek Business

Assuming the 90 days trading horizon JLT MOBILE is expected to generate 1.79 times less return on investment than Newtek Business. In addition to that, JLT MOBILE is 3.44 times more volatile than Newtek Business Services. It trades about 0.03 of its total potential returns per unit of risk. Newtek Business Services is currently generating about 0.17 per unit of volatility. If you would invest  1,201  in Newtek Business Services on October 22, 2024 and sell it today you would earn a total of  57.00  from holding Newtek Business Services or generate 4.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

JLT MOBILE PUTER  vs.  Newtek Business Services

JLT MOBILE PUTER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLT MOBILE PUTER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Newtek Business Services

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with JLT MOBILE and Newtek Business

The main advantage of trading using opposite JLT MOBILE and Newtek Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLT MOBILE 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 JLT MOBILE PUTER 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.