Correlation Between Aldel Financial and 58013MFT6

Can any of the company-specific risk be diversified away by investing in both Aldel Financial and 58013MFT6 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 58013MFT6 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 MCD 515 09 SEP 52, you can compare the effects of market volatilities on Aldel Financial and 58013MFT6 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 58013MFT6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and 58013MFT6.

Diversification Opportunities for Aldel Financial and 58013MFT6

0.64

Correlation Coefficient

Aldel Financial  58013MFT6

Poor diversification

The 3 months correlation between Aldel and 58013MFT6 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and MCD 515 09 SEP 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCD 515 09 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 58013MFT6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCD 515 09 has no effect on the direction of Aldel Financial i.e., Aldel Financial and 58013MFT6 go up and down completely randomly.

Pair Corralation between Aldel Financial and 58013MFT6

Assuming the 90 days horizon Aldel Financial II is not expected to generate positive returns. However, Aldel Financial II is 12.53 times less risky than 58013MFT6. It waists most of its returns potential to compensate for thr risk taken. 58013MFT6 is generating about -0.07 per unit of risk. If you would invest  999.00  in Aldel Financial II on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Aldel Financial II or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	55.56%
Values	Daily Returns

Aldel Financial II  vs.  MCD 515 09 SEP 52

Aldel Financial II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aldel Financial II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Aldel Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

MCD 515 09

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCD 515 09 SEP 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 58013MFT6 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aldel Financial and 58013MFT6

The main advantage of trading using opposite Aldel Financial and 58013MFT6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, 58013MFT6 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 58013MFT6 will offset losses from the drop in 58013MFT6's long position.

The idea behind Aldel Financial II and MCD 515 09 SEP 52 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.