Correlation Between Aldel Financial and Investment

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

Diversification Opportunities for Aldel Financial and Investment

-0.15

Correlation Coefficient

Aldel Financial  Investment

Good diversification

The 3 months correlation between Aldel and Investment is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Investment AB Latour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Latour 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Latour has no effect on the direction of Aldel Financial i.e., Aldel Financial and Investment go up and down completely randomly.

Pair Corralation between Aldel Financial and Investment

Assuming the 90 days horizon Aldel Financial II is expected to generate 4.82 times more return on investment than Investment. However, Aldel Financial is 4.82 times more volatile than Investment AB Latour. It trades about 0.05 of its potential returns per unit of risk. Investment AB Latour is currently generating about 0.08 per unit of risk. If you would invest  25.00  in Aldel Financial II on December 22, 2024 and sell it today you would earn a total of  1.00  from holding Aldel Financial II or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Aldel Financial II  vs.  Investment AB Latour

Aldel Financial II

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Aldel Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Investment AB Latour

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Investment AB Latour are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aldel Financial and Investment

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

The idea behind Aldel Financial II and Investment AB Latour 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.