Correlation Between Aldel Financial and Gap,

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

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

Diversification Opportunities for Aldel Financial and Gap,

-0.41

Correlation Coefficient

Aldel Financial  Gap,

Very good diversification

The 3 months correlation between Aldel and Gap, is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Aldel Financial 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 Aldel Financial II are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Aldel Financial i.e., Aldel Financial and Gap, go up and down completely randomly.

Pair Corralation between Aldel Financial and Gap,

Given the investment horizon of 90 days Aldel Financial II is expected to generate 0.03 times more return on investment than Gap,. However, Aldel Financial II is 31.12 times less risky than Gap,. It trades about 0.25 of its potential returns per unit of risk. The Gap, is currently generating about -0.07 per unit of risk. If you would invest  990.00  in Aldel Financial II on December 18, 2024 and sell it today you would earn a total of  16.00  from holding Aldel Financial II or generate 1.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aldel Financial II  vs.  The Gap,

Aldel Financial II

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 19 (%) 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gap,

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gap, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Aldel Financial and Gap,

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

The idea behind Aldel Financial II and The Gap, 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.