Correlation Between Newtek Business and Atlanticus Holdings

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

Diversification Opportunities for Newtek Business and Atlanticus Holdings

0.71

Correlation Coefficient

Newtek Business  Atlanticus Holdings

Poor diversification

The 3 months correlation between Newtek and Atlanticus is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Newtek Business Services and Atlanticus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings 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 Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings has no effect on the direction of Newtek Business i.e., Newtek Business and Atlanticus Holdings go up and down completely randomly.

Pair Corralation between Newtek Business and Atlanticus Holdings

If you would invest  2,347  in Atlanticus Holdings on September 26, 2024 and sell it today you would earn a total of  33.00  from holding Atlanticus Holdings or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Newtek Business Services  vs.  Atlanticus Holdings

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 quite persistent basic indicators, Newtek Business is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Atlanticus Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Newtek Business and Atlanticus Holdings

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

The idea behind Newtek Business Services and Atlanticus 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.