Correlation Between Aldel Financial and ARB
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and ARB 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 ARB 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 ARB Limited, you can compare the effects of market volatilities on Aldel Financial and ARB 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 ARB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and ARB.
Diversification Opportunities for Aldel Financial and ARB
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aldel and ARB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and ARB Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARB Limited 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 ARB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARB Limited has no effect on the direction of Aldel Financial i.e., Aldel Financial and ARB go up and down completely randomly.
Pair Corralation between Aldel Financial and ARB
If you would invest 999.00 in Aldel Financial II on December 8, 2024 and sell it today you would earn a total of 5.00 from holding Aldel Financial II or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Aldel Financial II vs. ARB Limited
Performance |
| Timeline |
| Aldel Financial II |
| ARB Limited |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Aldel Financial and ARB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and ARB
The main advantage of trading using opposite Aldel Financial and ARB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, ARB 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 ARB will offset losses from the drop in ARB's long position.| Aldel Financial vs. Fidus Investment Corp | ||
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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