Correlation Between Aldel Financial and Nasdaq
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Nasdaq 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 Nasdaq 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 Nasdaq Inc, you can compare the effects of market volatilities on Aldel Financial and Nasdaq 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 Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Nasdaq.
Diversification Opportunities for Aldel Financial and Nasdaq
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aldel and Nasdaq is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc 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 Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Aldel Financial i.e., Aldel Financial and Nasdaq go up and down completely randomly.
Pair Corralation between Aldel Financial and Nasdaq
Assuming the 90 days horizon Aldel Financial is expected to generate 46.45 times less return on investment than Nasdaq. But when comparing it to its historical volatility, Aldel Financial II is 9.25 times less risky than Nasdaq. It trades about 0.08 of its potential returns per unit of risk. Nasdaq Inc is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 7,534 in Nasdaq Inc on August 29, 2024 and sell it today you would earn a total of 731.00 from holding Nasdaq Inc or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aldel Financial II vs. Nasdaq Inc
Performance |
| Timeline |
| Aldel Financial II |
| Nasdaq Inc |
Aldel Financial and Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Nasdaq
The main advantage of trading using opposite Aldel Financial and Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Nasdaq 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 Nasdaq will offset losses from the drop in Nasdaq'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 |
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 Correlations module to find global opportunities by holding instruments from different markets.
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