Correlation Between Aldel Financial and Marine Products
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Marine Products 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 Marine Products 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 Marine Products, you can compare the effects of market volatilities on Aldel Financial and Marine Products 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 Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Marine Products.
Diversification Opportunities for Aldel Financial and Marine Products
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aldel and Marine is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Aldel Financial i.e., Aldel Financial and Marine Products go up and down completely randomly.
Pair Corralation between Aldel Financial and Marine Products
Given the investment horizon of 90 days Aldel Financial II is expected to generate 0.07 times more return on investment than Marine Products. However, Aldel Financial II is 14.1 times less risky than Marine Products. It trades about 0.15 of its potential returns per unit of risk. Marine Products is currently generating about -0.24 per unit of risk. If you would invest 990.00 in Aldel Financial II on October 11, 2024 and sell it today you would earn a total of 3.00 from holding Aldel Financial II or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Aldel Financial II vs. Marine Products
Performance |
| Timeline |
| Aldel Financial II |
| Marine Products |
Aldel Financial and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Marine Products
The main advantage of trading using opposite Aldel Financial and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Aldel Financial vs. Trio Tech International | Aldel Financial vs. Valmont Industries | Aldel Financial vs. CECO Environmental Corp | Aldel Financial vs. Skyline |
| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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