Correlation Between Abacus Life, and Aldel Financial

Can any of the company-specific risk be diversified away by investing in both Abacus Life, and Aldel Financial 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 Abacus Life, and Aldel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abacus Life, 9875 and Aldel Financial II, you can compare the effects of market volatilities on Abacus Life, and Aldel Financial 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 Abacus Life, with a short position of Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abacus Life, and Aldel Financial.

Diversification Opportunities for Abacus Life, and Aldel Financial

-0.44

Correlation Coefficient

Abacus Life,  Aldel Financial

Very good diversification

The 3 months correlation between Abacus and Aldel is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life, 9875 and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II and Abacus Life, 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 Abacus Life, 9875 are associated (or correlated) with Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of Abacus Life, i.e., Abacus Life, and Aldel Financial go up and down completely randomly.

Pair Corralation between Abacus Life, and Aldel Financial

Assuming the 90 days horizon Abacus Life, 9875 is expected to generate 42.76 times more return on investment than Aldel Financial. However, Abacus Life, is 42.76 times more volatile than Aldel Financial II. It trades about 0.03 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.2 per unit of risk. If you would invest  2,607  in Abacus Life, 9875 on October 23, 2024 and sell it today you would earn a total of  60.00  from holding Abacus Life, 9875 or generate 2.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	40.0%
Values	Daily Returns

Abacus Life, 9875  vs.  Aldel Financial II

Abacus Life, 9875

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Abacus Life, 9875 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Abacus Life, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aldel Financial II

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Aldel Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Abacus Life, and Aldel Financial

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

The idea behind Abacus Life, 9875 and Aldel Financial II 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.