Correlation Between Atlantic Coastal and AGBA Acquisition
Can any of the company-specific risk be diversified away by investing in both Atlantic Coastal and AGBA 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 Atlantic Coastal and AGBA Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic Coastal Acquisition and AGBA Acquisition Limited, you can compare the effects of market volatilities on Atlantic Coastal and AGBA 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 Atlantic Coastal with a short position of AGBA Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Coastal and AGBA Acquisition.
Diversification Opportunities for Atlantic Coastal and AGBA Acquisition
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlantic and AGBA is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Coastal Acquisition and AGBA Acquisition Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGBA Acquisition and Atlantic Coastal 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 Atlantic Coastal Acquisition are associated (or correlated) with AGBA Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGBA Acquisition has no effect on the direction of Atlantic Coastal i.e., Atlantic Coastal and AGBA Acquisition go up and down completely randomly.
Pair Corralation between Atlantic Coastal and AGBA Acquisition
Assuming the 90 days horizon Atlantic Coastal is expected to generate 1.29 times less return on investment than AGBA Acquisition. But when comparing it to its historical volatility, Atlantic Coastal Acquisition is 1.72 times less risky than AGBA Acquisition. It trades about 0.15 of its potential returns per unit of risk. AGBA Acquisition Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8.26 in AGBA Acquisition Limited on September 3, 2024 and sell it today you would earn a total of 12.74 from holding AGBA Acquisition Limited or generate 154.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 29.21% |
| Values | Daily Returns |
Atlantic Coastal Acquisition vs. AGBA Acquisition Limited
Performance |
| Timeline |
| Atlantic Coastal Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AGBA Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Atlantic Coastal and AGBA Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic Coastal and AGBA Acquisition
The main advantage of trading using opposite Atlantic Coastal and AGBA Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Coastal position performs unexpectedly, AGBA 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 AGBA Acquisition will offset losses from the drop in AGBA Acquisition's long position.The idea behind Atlantic Coastal Acquisition and AGBA Acquisition Limited 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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