Correlation Between Aldel Financial and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Flexible Solutions 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 Flexible Solutions 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 Flexible Solutions International, you can compare the effects of market volatilities on Aldel Financial and Flexible Solutions 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 Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Flexible Solutions.
Diversification Opportunities for Aldel Financial and Flexible Solutions
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aldel and Flexible is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions 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 Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Aldel Financial i.e., Aldel Financial and Flexible Solutions go up and down completely randomly.
Pair Corralation between Aldel Financial and Flexible Solutions
Assuming the 90 days horizon Aldel Financial is expected to generate 109.64 times less return on investment than Flexible Solutions. But when comparing it to its historical volatility, Aldel Financial II is 34.64 times less risky than Flexible Solutions. It trades about 0.04 of its potential returns per unit of risk. Flexible Solutions International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Flexible Solutions International on August 24, 2024 and sell it today you would earn a total of 248.00 from holding Flexible Solutions International or generate 168.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.64% |
| Values | Daily Returns |
Aldel Financial II vs. Flexible Solutions Internation
Performance |
| Timeline |
| Aldel Financial II |
| Flexible Solutions |
Aldel Financial and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Flexible Solutions
The main advantage of trading using opposite Aldel Financial and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| Aldel Financial vs. Voyager Acquisition Corp | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I | Aldel Financial vs. YHN Acquisition I |
| Flexible Solutions vs. Eshallgo Class A | Flexible Solutions vs. Amtech Systems | Flexible Solutions vs. Gold Fields Ltd | Flexible Solutions vs. Aegean Airlines SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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