Correlation Between Palomar Holdings and NewtekOne, 850

Can any of the company-specific risk be diversified away by investing in both Palomar Holdings and NewtekOne, 850 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 Palomar Holdings and NewtekOne, 850 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Palomar Holdings and NewtekOne, 850 percent, you can compare the effects of market volatilities on Palomar Holdings and NewtekOne, 850 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 Palomar Holdings with a short position of NewtekOne, 850. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palomar Holdings and NewtekOne, 850.

Diversification Opportunities for Palomar Holdings and NewtekOne, 850

0.76

Correlation Coefficient

Palomar Holdings  NewtekOne, 850

Poor diversification

The 3 months correlation between Palomar and NewtekOne, is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Palomar Holdings and NewtekOne, 850 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewtekOne, 850 percent and Palomar Holdings 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 Palomar Holdings are associated (or correlated) with NewtekOne, 850. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewtekOne, 850 percent has no effect on the direction of Palomar Holdings i.e., Palomar Holdings and NewtekOne, 850 go up and down completely randomly.

Pair Corralation between Palomar Holdings and NewtekOne, 850

Given the investment horizon of 90 days Palomar Holdings is expected to generate 6.92 times more return on investment than NewtekOne, 850. However, Palomar Holdings is 6.92 times more volatile than NewtekOne, 850 percent. It trades about 0.06 of its potential returns per unit of risk. NewtekOne, 850 percent is currently generating about 0.1 per unit of risk. If you would invest  10,158  in Palomar Holdings on October 11, 2024 and sell it today you would earn a total of  429.00  from holding Palomar Holdings or generate 4.22% return on investment over 90 days.

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

Palomar Holdings  vs.  NewtekOne, 850 percent

Palomar Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Palomar Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating primary indicators, Palomar Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NewtekOne, 850 percent

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NewtekOne, 850 percent are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, NewtekOne, 850 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Palomar Holdings and NewtekOne, 850

The main advantage of trading using opposite Palomar Holdings and NewtekOne, 850 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palomar Holdings position performs unexpectedly, NewtekOne, 850 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, 850 will offset losses from the drop in NewtekOne, 850's long position.

The idea behind Palomar Holdings and NewtekOne, 850 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.