Correlation Between Aldel Financial and ICC Holdings
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and ICC Holdings 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 ICC Holdings 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 ICC Holdings, you can compare the effects of market volatilities on Aldel Financial and ICC Holdings 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 ICC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and ICC Holdings.
Diversification Opportunities for Aldel Financial and ICC Holdings
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aldel and ICC is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Aldel Financial i.e., Aldel Financial and ICC Holdings go up and down completely randomly.
Pair Corralation between Aldel Financial and ICC Holdings
Assuming the 90 days horizon Aldel Financial is expected to generate 4.89 times less return on investment than ICC Holdings. But when comparing it to its historical volatility, Aldel Financial II is 3.61 times less risky than ICC Holdings. It trades about 0.12 of its potential returns per unit of risk. ICC Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,299 in ICC Holdings on August 28, 2024 and sell it today you would earn a total of 26.00 from holding ICC Holdings or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Aldel Financial II vs. ICC Holdings
Performance |
| Timeline |
| Aldel Financial II |
| ICC Holdings |
Aldel Financial and ICC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and ICC Holdings
The main advantage of trading using opposite Aldel Financial and ICC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, ICC Holdings 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 ICC Holdings will offset losses from the drop in ICC Holdings' long position.| Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. Vine Hill Capital | Aldel Financial vs. DP Cap Acquisition | Aldel Financial vs. PowerUp Acquisition Corp |
| ICC Holdings vs. Investors Title | ICC Holdings vs. AMERISAFE | ICC Holdings vs. Essent Group | ICC Holdings vs. MGIC Investment 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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