Correlation Between Aldel Financial and Genuine Parts
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Genuine Parts 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 Genuine Parts 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 Genuine Parts Co, you can compare the effects of market volatilities on Aldel Financial and Genuine Parts 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 Genuine Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Genuine Parts.
Diversification Opportunities for Aldel Financial and Genuine Parts
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aldel and Genuine is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Genuine Parts Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts 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 Genuine Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuine Parts has no effect on the direction of Aldel Financial i.e., Aldel Financial and Genuine Parts go up and down completely randomly.
Pair Corralation between Aldel Financial and Genuine Parts
Given the investment horizon of 90 days Aldel Financial II is expected to generate 0.06 times more return on investment than Genuine Parts. However, Aldel Financial II is 15.91 times less risky than Genuine Parts. It trades about 0.2 of its potential returns per unit of risk. Genuine Parts Co is currently generating about -0.02 per unit of risk. If you would invest 990.00 in Aldel Financial II on November 9, 2024 and sell it today you would earn a total of 9.00 from holding Aldel Financial II or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 13.48% |
| Values | Daily Returns |
Aldel Financial II vs. Genuine Parts Co
Performance |
| Timeline |
| Aldel Financial II |
| Genuine Parts |
Aldel Financial and Genuine Parts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Genuine Parts
The main advantage of trading using opposite Aldel Financial and Genuine Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Genuine Parts 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 Genuine Parts will offset losses from the drop in Genuine Parts' long position.| Aldel Financial vs. Sony Group Corp | Aldel Financial vs. Playstudios | Aldel Financial vs. California Engels Mining | Aldel Financial vs. Integrated Media Technology |
| Genuine Parts vs. Dover | Genuine Parts vs. Cincinnati Financial | Genuine Parts vs. Leggett Platt Incorporated | Genuine Parts vs. WW Grainger |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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