Correlation Between Distoken Acquisition and BGC

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

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

Diversification Opportunities for Distoken Acquisition and BGC

-0.03

Correlation Coefficient

Distoken Acquisition  BGC

Good diversification

The 3 months correlation between Distoken and BGC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and BGC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Group 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 BGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Group has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and BGC go up and down completely randomly.

Pair Corralation between Distoken Acquisition and BGC

Given the investment horizon of 90 days Distoken Acquisition is expected to generate 0.19 times more return on investment than BGC. However, Distoken Acquisition is 5.13 times less risky than BGC. It trades about 0.11 of its potential returns per unit of risk. BGC Group is currently generating about 0.01 per unit of risk. If you would invest  1,087  in Distoken Acquisition on September 29, 2024 and sell it today you would earn a total of  33.00  from holding Distoken Acquisition or generate 3.04% return on investment over 90 days.

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

Distoken Acquisition  vs.  BGC Group

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

BGC Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BGC Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, BGC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Distoken Acquisition and BGC

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

The idea behind Distoken Acquisition and BGC Group 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.