Correlation Between Northstar Clean and Aldel Financial

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

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

Diversification Opportunities for Northstar Clean and Aldel Financial

0.12

Correlation Coefficient

Northstar Clean  Aldel Financial

Average diversification

The 3 months correlation between Northstar and Aldel is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies 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 Northstar Clean 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 Northstar Clean Technologies 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 Northstar Clean i.e., Northstar Clean and Aldel Financial go up and down completely randomly.

Pair Corralation between Northstar Clean and Aldel Financial

Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 22.4 times more return on investment than Aldel Financial. However, Northstar Clean is 22.4 times more volatile than Aldel Financial II. It trades about 0.35 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.11 per unit of risk. If you would invest  23.00  in Northstar Clean Technologies on October 6, 2024 and sell it today you would earn a total of  7.00  from holding Northstar Clean Technologies or generate 30.43% return on investment over 90 days.

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

Northstar Clean Technologies  vs.  Aldel Financial II

Northstar Clean Tech

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Northstar Clean Technologies are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Northstar Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Aldel Financial II

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 5 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Northstar Clean and Aldel Financial

The main advantage of trading using opposite Northstar Clean and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean 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 Northstar Clean Technologies 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.