Correlation Between Dalrada Financial and Aerius International

Can any of the company-specific risk be diversified away by investing in both Dalrada Financial and Aerius International 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 Dalrada Financial and Aerius International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dalrada Financial Corp and Aerius International, you can compare the effects of market volatilities on Dalrada Financial and Aerius International 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 Dalrada Financial with a short position of Aerius International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalrada Financial and Aerius International.

Diversification Opportunities for Dalrada Financial and Aerius International

0.33

Correlation Coefficient

Dalrada Financial  Aerius International

Weak diversification

The 3 months correlation between Dalrada and Aerius is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dalrada Financial Corp and Aerius International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerius International and Dalrada 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 Dalrada Financial Corp are associated (or correlated) with Aerius International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerius International has no effect on the direction of Dalrada Financial i.e., Dalrada Financial and Aerius International go up and down completely randomly.

Pair Corralation between Dalrada Financial and Aerius International

Given the investment horizon of 90 days Dalrada Financial Corp is expected to generate 10.62 times more return on investment than Aerius International. However, Dalrada Financial is 10.62 times more volatile than Aerius International. It trades about 0.02 of its potential returns per unit of risk. Aerius International is currently generating about 0.21 per unit of risk. If you would invest  8.10  in Dalrada Financial Corp on August 31, 2024 and sell it today you would lose (0.90) from holding Dalrada Financial Corp or give up 11.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dalrada Financial Corp  vs.  Aerius International

Dalrada Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dalrada Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aerius International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aerius International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Aerius International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dalrada Financial and Aerius International

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

The idea behind Dalrada Financial Corp and Aerius International 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.