Correlation Between Analog Devices and Distoken Acquisition

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

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

Diversification Opportunities for Analog Devices and Distoken Acquisition

-0.77

Correlation Coefficient

Analog Devices  Distoken Acquisition

Pay attention - limited upside

The 3 months correlation between Analog and Distoken is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Distoken Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distoken Acquisition and Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and Distoken Acquisition go up and down completely randomly.

Pair Corralation between Analog Devices and Distoken Acquisition

Considering the 90-day investment horizon Analog Devices is expected to generate 33.0 times less return on investment than Distoken Acquisition. But when comparing it to its historical volatility, Analog Devices is 26.06 times less risky than Distoken Acquisition. It trades about 0.04 of its potential returns per unit of risk. Distoken Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Distoken Acquisition on October 4, 2024 and sell it today you would earn a total of  1,120  from holding Distoken Acquisition or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.72%
Values	Daily Returns

Analog Devices  vs.  Distoken Acquisition

Analog Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Analog Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Distoken Acquisition

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Distoken Acquisition are ranked lower than 8 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Analog Devices and Distoken Acquisition

The main advantage of trading using opposite Analog Devices and Distoken Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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.

The idea behind Analog Devices and Distoken Acquisition 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.