Correlation Between Distoken Acquisition and FinVolution
Can any of the company-specific risk be diversified away by investing in both Distoken Acquisition and FinVolution 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 FinVolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distoken Acquisition and FinVolution Group, you can compare the effects of market volatilities on Distoken Acquisition and FinVolution 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 FinVolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distoken Acquisition and FinVolution.
Diversification Opportunities for Distoken Acquisition and FinVolution
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Distoken and FinVolution is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and FinVolution Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinVolution Group 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 FinVolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinVolution Group has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and FinVolution go up and down completely randomly.
Pair Corralation between Distoken Acquisition and FinVolution
Assuming the 90 days horizon Distoken Acquisition is expected to generate 27.86 times more return on investment than FinVolution. However, Distoken Acquisition is 27.86 times more volatile than FinVolution Group. It trades about 0.31 of its potential returns per unit of risk. FinVolution Group is currently generating about 0.03 per unit of risk. If you would invest 1.40 in Distoken Acquisition on August 27, 2024 and sell it today you would earn a total of 1.01 from holding Distoken Acquisition or generate 72.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.57% |
| Values | Daily Returns |
Distoken Acquisition vs. FinVolution Group
Performance |
| Timeline |
| Distoken Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| FinVolution Group |
Distoken Acquisition and FinVolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distoken Acquisition and FinVolution
The main advantage of trading using opposite Distoken Acquisition and FinVolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition position performs unexpectedly, FinVolution 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 FinVolution will offset losses from the drop in FinVolution's long position.| Distoken Acquisition vs. PowerUp Acquisition Corp | Distoken Acquisition vs. Aurora Innovation | Distoken Acquisition vs. HUMANA INC | Distoken Acquisition vs. Aquagold International |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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