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

-0.04

Correlation Coefficient

PowerUp Acquisition  Distoken Acquisition

Good diversification

The 3 months correlation between PowerUp and Distoken is -0.04. 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

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 3.5 times more return on investment than Distoken Acquisition. However, PowerUp Acquisition is 3.5 times more volatile than Distoken Acquisition. It trades about 0.03 of its potential returns per unit of risk. Distoken Acquisition is currently generating about -0.03 per unit of risk. If you would invest  1,145  in PowerUp Acquisition Corp on December 1, 2024 and sell it today you would earn a total of  15.00  from holding PowerUp Acquisition Corp or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  Distoken Acquisition

PowerUp Acquisition Corp

Risk-Adjusted Performance

Weak

Over the last 90 days PowerUp Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unfluctuating basic indicators, PowerUp Acquisition may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Distoken Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Distoken Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. 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 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.