Correlation Between Aldel Financial and SFL
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and SFL 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 SFL 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 SFL Corporation, you can compare the effects of market volatilities on Aldel Financial and SFL 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 SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and SFL.
Diversification Opportunities for Aldel Financial and SFL
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aldel and SFL is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation 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 SFL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFL Corporation has no effect on the direction of Aldel Financial i.e., Aldel Financial and SFL go up and down completely randomly.
Pair Corralation between Aldel Financial and SFL
Assuming the 90 days horizon Aldel Financial II is expected to generate 0.07 times more return on investment than SFL. However, Aldel Financial II is 14.38 times less risky than SFL. It trades about 0.0 of its potential returns per unit of risk. SFL Corporation is currently generating about -0.02 per unit of risk. If you would invest 999.00 in Aldel Financial II on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Aldel Financial II or generate 0.0% 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. SFL Corp.
Performance |
| Timeline |
| Aldel Financial II |
| SFL Corporation |
Aldel Financial and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and SFL
The main advantage of trading using opposite Aldel Financial and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, SFL 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 SFL will offset losses from the drop in SFL's long position.| Aldel Financial vs. RBC Bearings Incorporated | Aldel Financial vs. CECO Environmental Corp | Aldel Financial vs. EMCOR Group | Aldel Financial vs. Simpson Manufacturing |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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