Correlation Between Distoken Acquisition and HHG Capital

Can any of the company-specific risk be diversified away by investing in both Distoken Acquisition and HHG Capital 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 HHG Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Distoken Acquisition and HHG Capital, you can compare the effects of market volatilities on Distoken Acquisition and HHG Capital 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 HHG Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distoken Acquisition and HHG Capital.

Diversification Opportunities for Distoken Acquisition and HHG Capital

-0.62

Correlation Coefficient

Distoken Acquisition  HHG Capital

Excellent diversification

The 3 months correlation between Distoken and HHG is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and HHG Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HHG Capital 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 HHG Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HHG Capital has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and HHG Capital go up and down completely randomly.

Pair Corralation between Distoken Acquisition and HHG Capital

Given the investment horizon of 90 days Distoken Acquisition is expected to generate 11425.69 times less return on investment than HHG Capital. But when comparing it to its historical volatility, Distoken Acquisition is 2070.98 times less risky than HHG Capital. It trades about 0.07 of its potential returns per unit of risk. HHG Capital is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  17.00  in HHG Capital on July 4, 2024 and sell it today you would lose (10.80) from holding HHG Capital or give up 63.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	41.94%
Values	Daily Returns

Distoken Acquisition  vs.  HHG Capital

Distoken Acquisition

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Distoken Acquisition are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Distoken Acquisition is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

HHG Capital

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days HHG Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively unsteady fundamental indicators, HHG Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Distoken Acquisition and HHG Capital

The main advantage of trading using opposite Distoken Acquisition and HHG Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition position performs unexpectedly, HHG Capital 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 HHG Capital will offset losses from the drop in HHG Capital's long position.

The idea behind Distoken Acquisition and HHG Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.