Correlation Between Aldel Financial and Elutia
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Elutia 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 Elutia 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 Elutia Inc, you can compare the effects of market volatilities on Aldel Financial and Elutia 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 Elutia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Elutia.
Diversification Opportunities for Aldel Financial and Elutia
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aldel and Elutia is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Elutia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elutia Inc 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 Elutia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elutia Inc has no effect on the direction of Aldel Financial i.e., Aldel Financial and Elutia go up and down completely randomly.
Pair Corralation between Aldel Financial and Elutia
Given the investment horizon of 90 days Aldel Financial is expected to generate 10.79 times less return on investment than Elutia. But when comparing it to its historical volatility, Aldel Financial II is 56.39 times less risky than Elutia. It trades about 0.15 of its potential returns per unit of risk. Elutia Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 431.00 in Elutia Inc on October 13, 2024 and sell it today you would lose (105.00) from holding Elutia Inc or give up 24.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 3.63% |
| Values | Daily Returns |
Aldel Financial II vs. Elutia Inc
Performance |
| Timeline |
| Aldel Financial II |
| Elutia Inc |
Aldel Financial and Elutia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Elutia
The main advantage of trading using opposite Aldel Financial and Elutia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Elutia 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 Elutia will offset losses from the drop in Elutia's long position.| Aldel Financial vs. Cresud SACIF y | Aldel Financial vs. HNI Corp | Aldel Financial vs. RBC Bearings Incorporated | Aldel Financial vs. Emerson Electric |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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