Correlation Between Aldel Financial and Weyco
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Weyco 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 Weyco 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 Weyco Group, you can compare the effects of market volatilities on Aldel Financial and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Weyco.
Diversification Opportunities for Aldel Financial and Weyco
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aldel and Weyco is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Aldel Financial i.e., Aldel Financial and Weyco go up and down completely randomly.
Pair Corralation between Aldel Financial and Weyco
Assuming the 90 days horizon Aldel Financial is expected to generate 46.42 times less return on investment than Weyco. But when comparing it to its historical volatility, Aldel Financial II is 41.51 times less risky than Weyco. It trades about 0.08 of its potential returns per unit of risk. Weyco Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,368 in Weyco Group on August 29, 2024 and sell it today you would earn a total of 250.00 from holding Weyco Group or generate 7.42% 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. Weyco Group
Performance |
| Timeline |
| Aldel Financial II |
| Weyco Group |
Aldel Financial and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Weyco
The main advantage of trading using opposite Aldel Financial and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco'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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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