Correlation Between Astera Labs, and Newtek Business
Can any of the company-specific risk be diversified away by investing in both Astera Labs, 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 Astera Labs, and Newtek Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astera Labs, Common and Newtek Business Services, you can compare the effects of market volatilities on Astera Labs, 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 Astera Labs, with a short position of Newtek Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astera Labs, and Newtek Business.
Diversification Opportunities for Astera Labs, and Newtek Business
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Astera and Newtek is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Astera Labs, Common 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 Astera Labs, 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 Astera Labs, Common 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 Astera Labs, i.e., Astera Labs, and Newtek Business go up and down completely randomly.
Pair Corralation between Astera Labs, and Newtek Business
Given the investment horizon of 90 days Astera Labs, Common is expected to generate 1.02 times more return on investment than Newtek Business. However, Astera Labs, is 1.02 times more volatile than Newtek Business Services. It trades about 0.08 of its potential returns per unit of risk. Newtek Business Services is currently generating about -0.05 per unit of risk. If you would invest 6,203 in Astera Labs, Common on August 29, 2024 and sell it today you would earn a total of 4,345 from holding Astera Labs, Common or generate 70.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 56.09% |
| Values | Daily Returns |
Astera Labs, Common vs. Newtek Business Services
Performance |
| Timeline |
| Astera Labs, Common |
| Newtek Business Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Astera Labs, and Newtek Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astera Labs, and Newtek Business
The main advantage of trading using opposite Astera Labs, and Newtek Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astera Labs, 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 Astera Labs, Common 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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