Correlation Between Aldel Financial and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Sweetgreen 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 Sweetgreen 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 Sweetgreen, you can compare the effects of market volatilities on Aldel Financial and Sweetgreen 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 Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Sweetgreen.
Diversification Opportunities for Aldel Financial and Sweetgreen
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aldel and Sweetgreen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen 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 Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of Aldel Financial i.e., Aldel Financial and Sweetgreen go up and down completely randomly.
Pair Corralation between Aldel Financial and Sweetgreen
Assuming the 90 days horizon Aldel Financial is expected to generate 7222.0 times less return on investment than Sweetgreen. But when comparing it to its historical volatility, Aldel Financial II is 50.79 times less risky than Sweetgreen. It trades about 0.0 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,080 in Sweetgreen on September 3, 2024 and sell it today you would earn a total of 3,018 from holding Sweetgreen or generate 279.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 12.72% |
| Values | Daily Returns |
Aldel Financial II vs. Sweetgreen
Performance |
| Timeline |
| Aldel Financial II |
| Sweetgreen |
Aldel Financial and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Sweetgreen
The main advantage of trading using opposite Aldel Financial and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Sweetgreen 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 Sweetgreen will offset losses from the drop in Sweetgreen's long position.| Aldel Financial vs. Distoken Acquisition | Aldel Financial vs. Voyager Acquisition Corp | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I |
| Sweetgreen vs. Starbucks | Sweetgreen vs. Highway Holdings Limited | Sweetgreen vs. QCR Holdings | Sweetgreen vs. Partner Communications |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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