Correlation Between Aldel Financial and Comstock Holding

Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Comstock Holding 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 Comstock Holding 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 Comstock Holding Companies, you can compare the effects of market volatilities on Aldel Financial and Comstock Holding 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 Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Comstock Holding.

Diversification Opportunities for Aldel Financial and Comstock Holding

0.01

Correlation Coefficient

Aldel Financial  Comstock Holding

Significant diversification

The 3 months correlation between Aldel and Comstock is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com 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 Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of Aldel Financial i.e., Aldel Financial and Comstock Holding go up and down completely randomly.

Pair Corralation between Aldel Financial and Comstock Holding

Assuming the 90 days horizon Aldel Financial is expected to generate 9.21 times less return on investment than Comstock Holding. But when comparing it to its historical volatility, Aldel Financial II is 47.03 times less risky than Comstock Holding. It trades about 0.07 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  823.00  in Comstock Holding Companies on September 19, 2024 and sell it today you would lose (26.00) from holding Comstock Holding Companies or give up 3.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	62.5%
Values	Daily Returns

Aldel Financial II  vs.  Comstock Holding Companies

Aldel Financial II

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Aldel Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Comstock Holding Com

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Holding Companies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Comstock Holding is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aldel Financial and Comstock Holding

The main advantage of trading using opposite Aldel Financial and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Comstock Holding 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 Comstock Holding will offset losses from the drop in Comstock Holding's long position.

The idea behind Aldel Financial II and Comstock Holding Companies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..