Correlation Between Lion Financial and Distoken Acquisition
Can any of the company-specific risk be diversified away by investing in both Lion Financial and Distoken Acquisition 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 Lion Financial and Distoken Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Financial Group and Distoken Acquisition, you can compare the effects of market volatilities on Lion Financial and Distoken Acquisition 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 Lion Financial with a short position of Distoken Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Financial and Distoken Acquisition.
Diversification Opportunities for Lion Financial and Distoken Acquisition
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and Distoken is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lion Financial Group and Distoken Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distoken Acquisition and Lion Financial 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 Lion Financial Group are associated (or correlated) with Distoken Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distoken Acquisition has no effect on the direction of Lion Financial i.e., Lion Financial and Distoken Acquisition go up and down completely randomly.
Pair Corralation between Lion Financial and Distoken Acquisition
Assuming the 90 days horizon Lion Financial is expected to generate 43.76 times less return on investment than Distoken Acquisition. But when comparing it to its historical volatility, Lion Financial Group is 18.6 times less risky than Distoken Acquisition. It trades about 0.12 of its potential returns per unit of risk. Distoken Acquisition is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1.40 in Distoken Acquisition on August 30, 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 | 31.82% |
| Values | Daily Returns |
Lion Financial Group vs. Distoken Acquisition
Performance |
| Timeline |
| Lion Financial Group |
| Distoken Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Lion Financial and Distoken Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Financial and Distoken Acquisition
The main advantage of trading using opposite Lion Financial and Distoken Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Financial position performs unexpectedly, Distoken Acquisition 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 Distoken Acquisition will offset losses from the drop in Distoken Acquisition's long position.| Lion Financial vs. Raymond James Financial | Lion Financial vs. Selective Insurance Group | Lion Financial vs. Reinsurance Group of | Lion Financial vs. Houlihan Lokey |
| Distoken Acquisition vs. ClimateRock Class A | Distoken Acquisition vs. CF Acquisition VII | Distoken Acquisition vs. DP Cap Acquisition |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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