Correlation Between Goldenstone Acquisition and Aldel Financial

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

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

Diversification Opportunities for Goldenstone Acquisition and Aldel Financial

-0.02

Correlation Coefficient

Goldenstone Acquisition  Aldel Financial

Good diversification

The 3 months correlation between Goldenstone and Aldel is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Goldenstone Acquisition Limite 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 Goldenstone Acquisition 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 Goldenstone Acquisition Limited 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 Goldenstone Acquisition i.e., Goldenstone Acquisition and Aldel Financial go up and down completely randomly.

Pair Corralation between Goldenstone Acquisition and Aldel Financial

Assuming the 90 days horizon Goldenstone Acquisition is expected to generate 3.58 times less return on investment than Aldel Financial. In addition to that, Goldenstone Acquisition is 1.03 times more volatile than Aldel Financial II. It trades about 0.01 of its total potential returns per unit of risk. Aldel Financial II is currently generating about 0.05 per unit of volatility. If you would invest  25.00  in Aldel Financial II on December 23, 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	60.71%
Values	Daily Returns

Goldenstone Acquisition Limite  vs.  Aldel Financial II

Goldenstone Acquisition

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goldenstone Acquisition Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Goldenstone Acquisition may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 unsteady technical and fundamental indicators, Aldel Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goldenstone Acquisition and Aldel Financial

The main advantage of trading using opposite Goldenstone Acquisition and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldenstone Acquisition 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 Goldenstone Acquisition Limited 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.