Correlation Between Distoken Acquisition and Athena Technology

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

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

Diversification Opportunities for Distoken Acquisition and Athena Technology

-0.08

Correlation Coefficient

Distoken Acquisition  Athena Technology

Good diversification

The 3 months correlation between Distoken and Athena is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and Athena Technology Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athena Technology 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 Athena Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athena Technology has no effect on the direction of Distoken Acquisition i.e., Distoken Acquisition and Athena Technology go up and down completely randomly.

Pair Corralation between Distoken Acquisition and Athena Technology

Assuming the 90 days horizon Distoken Acquisition is expected to generate 17.06 times more return on investment than Athena Technology. However, Distoken Acquisition is 17.06 times more volatile than Athena Technology Acquisition. It trades about 0.05 of its potential returns per unit of risk. Athena Technology Acquisition is currently generating about 0.04 per unit of risk. If you would invest  3.50  in Distoken Acquisition on September 3, 2024 and sell it today you would lose (1.70) from holding Distoken Acquisition or give up 48.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	31.25%
Values	Daily Returns

Distoken Acquisition  vs.  Athena Technology Acquisition

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. In spite of fairly uncertain basic indicators, Distoken Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Athena Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Athena Technology Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Athena Technology is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Distoken Acquisition and Athena Technology

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

The idea behind Distoken Acquisition and Athena Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.