Correlation Between Aldel Financial and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Mativ 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 Mativ 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 Mativ Holdings, you can compare the effects of market volatilities on Aldel Financial and Mativ 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 Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Mativ Holdings.
Diversification Opportunities for Aldel Financial and Mativ Holdings
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aldel and Mativ is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of Aldel Financial i.e., Aldel Financial and Mativ Holdings go up and down completely randomly.
Pair Corralation between Aldel Financial and Mativ Holdings
Assuming the 90 days horizon Aldel Financial II is expected to generate 0.03 times more return on investment than Mativ Holdings. However, Aldel Financial II is 36.08 times less risky than Mativ Holdings. It trades about 0.03 of its potential returns per unit of risk. Mativ Holdings is currently generating about 0.0 per unit of risk. If you would invest 999.00 in Aldel Financial II on September 5, 2024 and sell it today you would earn a total of 1.00 from holding Aldel Financial II or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 6.06% |
| Values | Daily Returns |
Aldel Financial II vs. Mativ Holdings
Performance |
| Timeline |
| Aldel Financial II |
| Mativ Holdings |
Aldel Financial and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Mativ Holdings
The main advantage of trading using opposite Aldel Financial and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Mativ 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.| Aldel Financial vs. Distoken Acquisition | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I | Aldel Financial vs. PowerUp Acquisition Corp |
| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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