Correlation Between Aldel Financial and Narragansett Electric
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Narragansett Electric 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 Narragansett Electric 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 The Narragansett Electric, you can compare the effects of market volatilities on Aldel Financial and Narragansett Electric 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 Narragansett Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Narragansett Electric.
Diversification Opportunities for Aldel Financial and Narragansett Electric
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aldel and Narragansett is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and The Narragansett Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Narragansett Electric 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 Narragansett Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Narragansett Electric has no effect on the direction of Aldel Financial i.e., Aldel Financial and Narragansett Electric go up and down completely randomly.
Pair Corralation between Aldel Financial and Narragansett Electric
If you would invest 990.00 in Aldel Financial II on October 28, 2024 and sell it today you would earn a total of 8.00 from holding Aldel Financial II or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 3.57% |
| Values | Daily Returns |
Aldel Financial II vs. The Narragansett Electric
Performance |
| Timeline |
| Aldel Financial II |
| The Narragansett Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aldel Financial and Narragansett Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Narragansett Electric
The main advantage of trading using opposite Aldel Financial and Narragansett Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Narragansett Electric 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 Narragansett Electric will offset losses from the drop in Narragansett Electric's long position.| Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I | Aldel Financial vs. YHN Acquisition I | Aldel Financial vs. CO2 Energy Transition |
| Narragansett Electric vs. United Airlines Holdings | Narragansett Electric vs. Alaska Air Group | Narragansett Electric vs. Sun Country Airlines | Narragansett Electric vs. Kaiser Aluminum |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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