Correlation Between SmartStop Self and Aldel Financial

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

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

Diversification Opportunities for SmartStop Self and Aldel Financial

0.23

Correlation Coefficient

SmartStop Self  Aldel Financial

Modest diversification

The 3 months correlation between SmartStop and Aldel is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SmartStop Self Storage 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 SmartStop Self 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 SmartStop Self Storage 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 SmartStop Self i.e., SmartStop Self and Aldel Financial go up and down completely randomly.

Pair Corralation between SmartStop Self and Aldel Financial

Considering the 90-day investment horizon SmartStop Self Storage is expected to generate 7.03 times more return on investment than Aldel Financial. However, SmartStop Self is 7.03 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 -0.02 per unit of risk. If you would invest  3,627  in SmartStop Self Storage on July 4, 2025 and sell it today you would earn a total of  137.00  from holding SmartStop Self Storage or generate 3.78% return on investment over 90 days.

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

SmartStop Self Storage  vs.  Aldel Financial II

SmartStop Self Storage

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in SmartStop Self Storage are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, SmartStop Self is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aldel Financial II

Risk-Adjusted Performance

Weakest

Over the last 90 days Aldel Financial II has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Aldel Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SmartStop Self and Aldel Financial

The main advantage of trading using opposite SmartStop Self and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartStop Self 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 SmartStop Self Storage 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.