Correlation Between Distoken Acquisition and GXO Logistics
Can any of the company-specific risk be diversified away by investing in both Distoken Acquisition and GXO Logistics 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 GXO Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distoken Acquisition and GXO Logistics, you can compare the effects of market volatilities on Distoken Acquisition and GXO Logistics 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 GXO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distoken Acquisition and GXO Logistics.
Diversification Opportunities for Distoken Acquisition and GXO Logistics
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Distoken and GXO is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and GXO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GXO Logistics 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 GXO Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GXO Logistics has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and GXO Logistics go up and down completely randomly.
Pair Corralation between Distoken Acquisition and GXO Logistics
Given the investment horizon of 90 days Distoken Acquisition is expected to generate 0.24 times more return on investment than GXO Logistics. However, Distoken Acquisition is 4.17 times less risky than GXO Logistics. It trades about 0.22 of its potential returns per unit of risk. GXO Logistics is currently generating about 0.0 per unit of risk. If you would invest 1,093 in Distoken Acquisition on August 27, 2024 and sell it today you would earn a total of 25.00 from holding Distoken Acquisition or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Distoken Acquisition vs. GXO Logistics
Performance |
| Timeline |
| Distoken Acquisition |
| GXO Logistics |
Distoken Acquisition and GXO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distoken Acquisition and GXO Logistics
The main advantage of trading using opposite Distoken Acquisition and GXO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition position performs unexpectedly, GXO Logistics 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 GXO Logistics will offset losses from the drop in GXO Logistics' long position.| Distoken Acquisition vs. PowerUp Acquisition Corp | Distoken Acquisition vs. Aurora Innovation | Distoken Acquisition vs. HUMANA INC | Distoken Acquisition vs. Aquagold International |
| GXO Logistics vs. Forward Air | GXO Logistics vs. Landstar System | GXO Logistics vs. JB Hunt Transport | GXO Logistics vs. Expeditors International of |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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