Correlation Between Aldel Financial and Lewis Clark
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Lewis Clark 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 Lewis Clark 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 Lewis Clark Bancorp, you can compare the effects of market volatilities on Aldel Financial and Lewis Clark 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 Lewis Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Lewis Clark.
Diversification Opportunities for Aldel Financial and Lewis Clark
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aldel and Lewis is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Lewis Clark Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lewis Clark Bancorp 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 Lewis Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lewis Clark Bancorp has no effect on the direction of Aldel Financial i.e., Aldel Financial and Lewis Clark go up and down completely randomly.
Pair Corralation between Aldel Financial and Lewis Clark
Assuming the 90 days horizon Aldel Financial is expected to generate 24.5 times less return on investment than Lewis Clark. But when comparing it to its historical volatility, Aldel Financial II is 10.61 times less risky than Lewis Clark. It trades about 0.12 of its potential returns per unit of risk. Lewis Clark Bancorp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,800 in Lewis Clark Bancorp on August 28, 2024 and sell it today you would earn a total of 200.00 from holding Lewis Clark Bancorp or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aldel Financial II vs. Lewis Clark Bancorp
Performance |
| Timeline |
| Aldel Financial II |
| Lewis Clark Bancorp |
Aldel Financial and Lewis Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Lewis Clark
The main advantage of trading using opposite Aldel Financial and Lewis Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Lewis Clark 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 Lewis Clark will offset losses from the drop in Lewis Clark's 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 |
| Lewis Clark vs. Aldel Financial II | Lewis Clark vs. Merit Medical Systems | Lewis Clark vs. Sonida Senior Living | Lewis Clark vs. Sabre Corpo |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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