Correlation Between Distoken Acquisition and Eagle Point

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

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

Diversification Opportunities for Distoken Acquisition and Eagle Point

0.84

Correlation Coefficient

Distoken Acquisition  Eagle Point

Very poor diversification

The 3 months correlation between Distoken and Eagle is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and Eagle Point Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Credit 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 Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Credit has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and Eagle Point go up and down completely randomly.

Pair Corralation between Distoken Acquisition and Eagle Point

Given the investment horizon of 90 days Distoken Acquisition is expected to generate 1.73 times more return on investment than Eagle Point. However, Distoken Acquisition is 1.73 times more volatile than Eagle Point Credit. It trades about 0.12 of its potential returns per unit of risk. Eagle Point Credit is currently generating about 0.11 per unit of risk. If you would invest  1,085  in Distoken Acquisition on September 26, 2024 and sell it today you would earn a total of  35.00  from holding Distoken Acquisition or generate 3.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Distoken Acquisition  vs.  Eagle Point Credit

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.

Eagle Point Credit

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Credit are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Eagle Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Distoken Acquisition and Eagle Point

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

The idea behind Distoken Acquisition and Eagle Point Credit 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.