Correlation Between Boston Omaha and Aldel Financial

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

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

Diversification Opportunities for Boston Omaha and Aldel Financial

-0.58

Correlation Coefficient

Boston Omaha  Aldel Financial

Excellent diversification

The 3 months correlation between Boston and Aldel is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Boston Omaha Corp 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 Boston Omaha 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 Boston Omaha Corp 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 Boston Omaha i.e., Boston Omaha and Aldel Financial go up and down completely randomly.

Pair Corralation between Boston Omaha and Aldel Financial

Considering the 90-day investment horizon Boston Omaha Corp is expected to generate 15.43 times more return on investment than Aldel Financial. However, Boston Omaha is 15.43 times more volatile than Aldel Financial II. It trades about 0.05 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.13 per unit of risk. If you would invest  1,297  in Boston Omaha Corp on September 29, 2024 and sell it today you would earn a total of  123.00  from holding Boston Omaha Corp or generate 9.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	37.3%
Values	Daily Returns

Boston Omaha Corp  vs.  Aldel Financial II

Boston Omaha Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Omaha Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Boston Omaha is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Aldel Financial II

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Aldel Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Boston Omaha and Aldel Financial

The main advantage of trading using opposite Boston Omaha and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Omaha 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 Boston Omaha Corp 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.