Correlation Between Flag Ship and Aldel Financial

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

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

Diversification Opportunities for Flag Ship and Aldel Financial

-0.59

Correlation Coefficient

Flag Ship  Aldel Financial

Excellent diversification

The 3 months correlation between Flag and Aldel is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Flag Ship Acquisition 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 Flag Ship 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 Flag Ship Acquisition 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 Flag Ship i.e., Flag Ship and Aldel Financial go up and down completely randomly.

Pair Corralation between Flag Ship and Aldel Financial

Assuming the 90 days horizon Flag Ship Acquisition is expected to generate 51.72 times more return on investment than Aldel Financial. However, Flag Ship is 51.72 times more volatile than Aldel Financial II. It trades about 0.02 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.12 per unit of risk. If you would invest  16.00  in Flag Ship Acquisition on May 5, 2025 and sell it today you would lose (3.00) from holding Flag Ship Acquisition or give up 18.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	58.73%
Values	Daily Returns

Flag Ship Acquisition  vs.  Aldel Financial II

Flag Ship Acquisition

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flag Ship Acquisition are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Flag Ship reported solid returns over the last few months and may actually be approaching a breakup point.

Aldel Financial II

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Aldel Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Flag Ship and Aldel Financial

The main advantage of trading using opposite Flag Ship and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flag Ship 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 Flag Ship Acquisition 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.