Correlation Between Distoken Acquisition and Lendingtree

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

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

Diversification Opportunities for Distoken Acquisition and Lendingtree

-0.87

Correlation Coefficient

Distoken Acquisition  Lendingtree

Pay attention - limited upside

The 3 months correlation between Distoken and Lendingtree is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and Lendingtree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendingtree 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 Lendingtree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendingtree has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and Lendingtree go up and down completely randomly.

Pair Corralation between Distoken Acquisition and Lendingtree

Given the investment horizon of 90 days Distoken Acquisition is expected to generate 0.16 times more return on investment than Lendingtree. However, Distoken Acquisition is 6.24 times less risky than Lendingtree. It trades about 0.02 of its potential returns per unit of risk. Lendingtree is currently generating about -0.13 per unit of risk. If you would invest  1,118  in Distoken Acquisition on September 23, 2024 and sell it today you would earn a total of  2.00  from holding Distoken Acquisition or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Distoken Acquisition  vs.  Lendingtree

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Lendingtree

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lendingtree has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Distoken Acquisition and Lendingtree

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

The idea behind Distoken Acquisition and Lendingtree 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.