Correlation Between Aldel Financial and Veea

Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Veea 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 Veea 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 Veea Inc, you can compare the effects of market volatilities on Aldel Financial and Veea 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 Veea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Veea.

Diversification Opportunities for Aldel Financial and Veea

-0.29

Correlation Coefficient

Aldel Financial  Veea

Very good diversification

The 3 months correlation between Aldel and Veea is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc 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 Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Aldel Financial i.e., Aldel Financial and Veea go up and down completely randomly.

Pair Corralation between Aldel Financial and Veea

Given the investment horizon of 90 days Aldel Financial II is expected to generate 0.02 times more return on investment than Veea. However, Aldel Financial II is 44.82 times less risky than Veea. It trades about 0.18 of its potential returns per unit of risk. Veea Inc is currently generating about -0.07 per unit of risk. If you would invest  993.00  in Aldel Financial II on October 24, 2024 and sell it today you would earn a total of  3.00  from holding Aldel Financial II or generate 0.3% return on investment over 90 days.

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

Aldel Financial II  vs.  Veea Inc

Aldel Financial II

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 18 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Aldel Financial and Veea

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

The idea behind Aldel Financial II and Veea Inc 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.