Correlation Between AMCON Distributing and Aldel Financial

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

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

Diversification Opportunities for AMCON Distributing and Aldel Financial

0.41

Correlation Coefficient

AMCON Distributing  Aldel Financial

Very weak diversification

The 3 months correlation between AMCON and Aldel is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II and AMCON Distributing 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 AMCON Distributing are associated (or correlated) with Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of AMCON Distributing i.e., AMCON Distributing and Aldel Financial go up and down completely randomly.

Pair Corralation between AMCON Distributing and Aldel Financial

Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Aldel Financial. In addition to that, AMCON Distributing is 34.58 times more volatile than Aldel Financial II. It trades about 0.0 of its total potential returns per unit of risk. Aldel Financial II is currently generating about 0.08 per unit of volatility. If you would invest  999.00  in Aldel Financial II on September 22, 2024 and sell it today you would earn a total of  4.00  from holding Aldel Financial II or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	68.25%
Values	Daily Returns

AMCON Distributing  vs.  Aldel Financial II

AMCON Distributing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMCON Distributing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, AMCON Distributing is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Aldel Financial II

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 6 (%) 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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AMCON Distributing and Aldel Financial

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

The idea behind AMCON Distributing and Aldel Financial II 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.