Correlation Between Plum Acquisition and Distoken Acquisition
Can any of the company-specific risk be diversified away by investing in both Plum Acquisition 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 Plum Acquisition and Distoken Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plum Acquisition Corp and Distoken Acquisition, you can compare the effects of market volatilities on Plum Acquisition 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 Plum Acquisition with a short position of Distoken Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plum Acquisition and Distoken Acquisition.
Diversification Opportunities for Plum Acquisition and Distoken Acquisition
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plum and Distoken is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Plum Acquisition Corp and Distoken Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distoken Acquisition and Plum 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 Plum Acquisition Corp 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 Plum Acquisition i.e., Plum Acquisition and Distoken Acquisition go up and down completely randomly.
Pair Corralation between Plum Acquisition and Distoken Acquisition
Assuming the 90 days horizon Plum Acquisition Corp is expected to generate 150.3 times more return on investment than Distoken Acquisition. However, Plum Acquisition is 150.3 times more volatile than Distoken Acquisition. It trades about 0.09 of its potential returns per unit of risk. Distoken Acquisition is currently generating about 0.04 per unit of risk. If you would invest 6.49 in Plum Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 8.51 from holding Plum Acquisition Corp or generate 131.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 49.72% |
| Values | Daily Returns |
Plum Acquisition Corp vs. Distoken Acquisition
Performance |
| Timeline |
| Plum Acquisition Corp |
| Distoken Acquisition |
Plum Acquisition and Distoken Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plum Acquisition and Distoken Acquisition
The main advantage of trading using opposite Plum Acquisition and Distoken Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plum Acquisition 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.| Plum Acquisition vs. Distoken Acquisition | Plum Acquisition vs. Voyager Acquisition Corp | Plum Acquisition vs. dMY Squared Technology | Plum Acquisition vs. YHN Acquisition I |
| Distoken Acquisition vs. Sphere Entertainment Co | Distoken Acquisition vs. Barrick Gold Corp | Distoken Acquisition vs. HE Equipment Services | Distoken Acquisition vs. Herc Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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