Correlation Between PhenixFIN 525 and Newtek Business
Can any of the company-specific risk be diversified away by investing in both PhenixFIN 525 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 PhenixFIN 525 and Newtek Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PhenixFIN 525 and Newtek Business Services, you can compare the effects of market volatilities on PhenixFIN 525 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 PhenixFIN 525 with a short position of Newtek Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of PhenixFIN 525 and Newtek Business.
Diversification Opportunities for PhenixFIN 525 and Newtek Business
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PhenixFIN and Newtek is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding PhenixFIN 525 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 PhenixFIN 525 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 PhenixFIN 525 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 PhenixFIN 525 i.e., PhenixFIN 525 and Newtek Business go up and down completely randomly.
Pair Corralation between PhenixFIN 525 and Newtek Business
Assuming the 90 days horizon PhenixFIN 525 is expected to generate 1.38 times less return on investment than Newtek Business. In addition to that, PhenixFIN 525 is 1.68 times more volatile than Newtek Business Services. It trades about 0.08 of its total potential returns per unit of risk. Newtek Business Services is currently generating about 0.18 per unit of volatility. If you would invest 2,451 in Newtek Business Services on August 30, 2024 and sell it today you would earn a total of 29.00 from holding Newtek Business Services or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PhenixFIN 525 vs. Newtek Business Services
Performance |
| Timeline |
| PhenixFIN 525 |
| Newtek Business Services |
PhenixFIN 525 and Newtek Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PhenixFIN 525 and Newtek Business
The main advantage of trading using opposite PhenixFIN 525 and Newtek Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PhenixFIN 525 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.| PhenixFIN 525 vs. Oxford Square Capital | PhenixFIN 525 vs. Atlanticus Holdings | PhenixFIN 525 vs. Oxford Square Capital | PhenixFIN 525 vs. Oxford Lane Capital |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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