Correlation Between Viemed Healthcare and Aldel Financial

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

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

Diversification Opportunities for Viemed Healthcare and Aldel Financial

-0.41

Correlation Coefficient

Viemed Healthcare  Aldel Financial

Very good diversification

The 3 months correlation between Viemed and Aldel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare i.e., Viemed Healthcare and Aldel Financial go up and down completely randomly.

Pair Corralation between Viemed Healthcare and Aldel Financial

Considering the 90-day investment horizon Viemed Healthcare is expected to generate 20.66 times more return on investment than Aldel Financial. However, Viemed Healthcare is 20.66 times more volatile than Aldel Financial II. It trades about 0.05 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.04 per unit of risk. If you would invest  853.00  in Viemed Healthcare on September 5, 2024 and sell it today you would earn a total of  17.00  from holding Viemed Healthcare or generate 1.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Viemed Healthcare  vs.  Aldel Financial II

Viemed Healthcare

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Viemed Healthcare are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Viemed Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aldel Financial II

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 2 (%) 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Viemed Healthcare and Aldel Financial

The main advantage of trading using opposite Viemed Healthcare and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare 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 Viemed Healthcare 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.