Correlation Between Aldel Financial and Aegon Funding
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Aegon Funding 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 Aegon Funding 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 Aegon Funding, you can compare the effects of market volatilities on Aldel Financial and Aegon Funding 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 Aegon Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Aegon Funding.
Diversification Opportunities for Aldel Financial and Aegon Funding
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aldel and Aegon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Aegon Funding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon Funding 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 Aegon Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon Funding has no effect on the direction of Aldel Financial i.e., Aldel Financial and Aegon Funding go up and down completely randomly.
Pair Corralation between Aldel Financial and Aegon Funding
Assuming the 90 days horizon Aldel Financial II is expected to generate 0.12 times more return on investment than Aegon Funding. However, Aldel Financial II is 8.32 times less risky than Aegon Funding. It trades about 0.12 of its potential returns per unit of risk. Aegon Funding is currently generating about -0.11 per unit of risk. If you would invest 1,000.00 in Aldel Financial II on September 15, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aldel Financial II vs. Aegon Funding
Performance |
| Timeline |
| Aldel Financial II |
| Aegon Funding |
Aldel Financial and Aegon Funding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Aegon Funding
The main advantage of trading using opposite Aldel Financial and Aegon Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Aegon Funding 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 Aegon Funding will offset losses from the drop in Aegon Funding's long position.| Aldel Financial vs. Distoken Acquisition | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I | Aldel Financial vs. YHN Acquisition I |
| Aegon Funding vs. Lindblad Expeditions Holdings | Aegon Funding vs. SFL Corporation | Aegon Funding vs. Proficient Auto Logistics, | Aegon Funding vs. Aldel Financial II |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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