Correlation Between Aldel Financial and Enersys
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Enersys 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 Enersys 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 Enersys, you can compare the effects of market volatilities on Aldel Financial and Enersys 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 Enersys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Enersys.
Diversification Opportunities for Aldel Financial and Enersys
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aldel and Enersys is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Enersys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersys 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 Enersys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersys has no effect on the direction of Aldel Financial i.e., Aldel Financial and Enersys go up and down completely randomly.
Pair Corralation between Aldel Financial and Enersys
Assuming the 90 days horizon Aldel Financial is expected to generate 4.63 times less return on investment than Enersys. But when comparing it to its historical volatility, Aldel Financial II is 9.87 times less risky than Enersys. It trades about 0.08 of its potential returns per unit of risk. Enersys is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,826 in Enersys on November 18, 2024 and sell it today you would earn a total of 107.00 from holding Enersys or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aldel Financial II vs. Enersys
Performance |
| Timeline |
| Aldel Financial II |
| Enersys |
Aldel Financial and Enersys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Enersys
The main advantage of trading using opposite Aldel Financial and Enersys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Enersys 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 Enersys will offset losses from the drop in Enersys' long position.| Aldel Financial vs. Genuine Parts Co | Aldel Financial vs. Vita Coco | Aldel Financial vs. Willamette Valley Vineyards | Aldel Financial vs. Diageo PLC ADR |
| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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