Correlation Between Distoken Acquisition and Eastern
Can any of the company-specific risk be diversified away by investing in both Distoken Acquisition and Eastern 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 Distoken Acquisition and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distoken Acquisition and Eastern Co, you can compare the effects of market volatilities on Distoken Acquisition and Eastern 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 Distoken Acquisition with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distoken Acquisition and Eastern.
Diversification Opportunities for Distoken Acquisition and Eastern
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Distoken and Eastern is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and Distoken Acquisition 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 Distoken Acquisition are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and Eastern go up and down completely randomly.
Pair Corralation between Distoken Acquisition and Eastern
Given the investment horizon of 90 days Distoken Acquisition is expected to generate 0.18 times more return on investment than Eastern. However, Distoken Acquisition is 5.61 times less risky than Eastern. It trades about 0.24 of its potential returns per unit of risk. Eastern Co is currently generating about -0.2 per unit of risk. If you would invest 1,091 in Distoken Acquisition on August 24, 2024 and sell it today you would earn a total of 27.00 from holding Distoken Acquisition or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Distoken Acquisition vs. Eastern Co
Performance |
| Timeline |
| Distoken Acquisition |
| Eastern |
Distoken Acquisition and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distoken Acquisition and Eastern
The main advantage of trading using opposite Distoken Acquisition and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Distoken Acquisition vs. Sweetgreen | Distoken Acquisition vs. The Cheesecake Factory | Distoken Acquisition vs. Uranium Energy Corp | Distoken Acquisition vs. BJs Restaurants |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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