Correlation Between Aldel Financial and Gentex
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on Aldel Financial and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Gentex.
Diversification Opportunities for Aldel Financial and Gentex
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aldel and Gentex is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Aldel Financial i.e., Aldel Financial and Gentex go up and down completely randomly.
Pair Corralation between Aldel Financial and Gentex
Assuming the 90 days horizon Aldel Financial is expected to generate 21.23 times less return on investment than Gentex. But when comparing it to its historical volatility, Aldel Financial II is 10.26 times less risky than Gentex. It trades about 0.04 of its potential returns per unit of risk. Gentex is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,009 in Gentex on September 4, 2024 and sell it today you would earn a total of 61.00 from holding Gentex or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aldel Financial II vs. Gentex
Performance |
| Timeline |
| Aldel Financial II |
| Gentex |
Aldel Financial and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Gentex
The main advantage of trading using opposite Aldel Financial and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.| Aldel Financial vs. Saia Inc | Aldel Financial vs. The Gap, | Aldel Financial vs. Summit Materials | Aldel Financial vs. Barrick Gold Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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