Correlation Between PowerUp Acquisition and Distoken Acquisition

Can any of the company-specific risk be diversified away by investing in both PowerUp 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 PowerUp 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 PowerUp Acquisition Corp and Distoken Acquisition, you can compare the effects of market volatilities on PowerUp 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 PowerUp Acquisition with a short position of Distoken Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerUp Acquisition and Distoken Acquisition.

Diversification Opportunities for PowerUp Acquisition and Distoken Acquisition

0.02

Correlation Coefficient

PowerUp Acquisition  Distoken Acquisition

Significant diversification

The 3 months correlation between PowerUp and Distoken is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp 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 PowerUp 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 PowerUp 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 PowerUp Acquisition i.e., PowerUp Acquisition and Distoken Acquisition go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and Distoken Acquisition

Given the investment horizon of 90 days PowerUp Acquisition is expected to generate 5.58 times less return on investment than Distoken Acquisition. But when comparing it to its historical volatility, PowerUp Acquisition Corp is 3.32 times less risky than Distoken Acquisition. It trades about 0.03 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  11.00  in Distoken Acquisition on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Distoken Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	18.75%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  Distoken Acquisition

PowerUp Acquisition Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PowerUp Acquisition Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, PowerUp Acquisition is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Distoken Acquisition

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with PowerUp Acquisition and Distoken Acquisition

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

The idea behind PowerUp Acquisition Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.