Correlation Between Cohen Circle and Distoken Acquisition

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

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

Diversification Opportunities for Cohen Circle and Distoken Acquisition

-0.52

Correlation Coefficient

Cohen Circle  Distoken Acquisition

Excellent diversification

The 3 months correlation between Cohen and Distoken is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Circle Acquisition and Distoken Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distoken Acquisition and Cohen Circle 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 Cohen Circle Acquisition 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 Cohen Circle i.e., Cohen Circle and Distoken Acquisition go up and down completely randomly.

Pair Corralation between Cohen Circle and Distoken Acquisition

Assuming the 90 days horizon Cohen Circle Acquisition is expected to generate 36.23 times more return on investment than Distoken Acquisition. However, Cohen Circle is 36.23 times more volatile than Distoken Acquisition. It trades about 0.36 of its potential returns per unit of risk. Distoken Acquisition is currently generating about 0.12 per unit of risk. If you would invest  27.00  in Cohen Circle Acquisition on September 18, 2024 and sell it today you would earn a total of  17.00  from holding Cohen Circle Acquisition or generate 62.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	17.46%
Values	Daily Returns

Cohen Circle Acquisition  vs.  Distoken Acquisition

Cohen Circle Acquisition

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Circle Acquisition are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Cohen Circle showed solid returns over the last few months and may actually be approaching a breakup point.

Distoken Acquisition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Distoken Acquisition are ranked lower than 9 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cohen Circle and Distoken Acquisition

The main advantage of trading using opposite Cohen Circle and Distoken Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Circle 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 Cohen Circle Acquisition 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.