Correlation Between AGBA Acquisition and Applied Blockchain

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Can any of the company-specific risk be diversified away by investing in both AGBA Acquisition and Applied Blockchain 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 AGBA Acquisition and Applied Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGBA Acquisition and Applied Blockchain, you can compare the effects of market volatilities on AGBA Acquisition and Applied Blockchain 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 AGBA Acquisition with a short position of Applied Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGBA Acquisition and Applied Blockchain.

Diversification Opportunities for AGBA Acquisition and Applied Blockchain

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between AGBA and Applied is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding AGBA Acquisition and Applied Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Blockchain and AGBA 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 AGBA Acquisition are associated (or correlated) with Applied Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Blockchain has no effect on the direction of AGBA Acquisition i.e., AGBA Acquisition and Applied Blockchain go up and down completely randomly.

Pair Corralation between AGBA Acquisition and Applied Blockchain

Given the investment horizon of 90 days AGBA Acquisition is expected to generate 1.53 times more return on investment than Applied Blockchain. However, AGBA Acquisition is 1.53 times more volatile than Applied Blockchain. It trades about 0.04 of its potential returns per unit of risk. Applied Blockchain is currently generating about 0.04 per unit of risk. If you would invest  660.00  in AGBA Acquisition on August 31, 2024 and sell it today you would lose (100.00) from holding AGBA Acquisition or give up 15.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy91.44%
ValuesDaily Returns

AGBA Acquisition  vs.  Applied Blockchain

 Performance 
       Timeline  
AGBA Acquisition 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AGBA Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Applied Blockchain 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Applied Blockchain are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Applied Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

AGBA Acquisition and Applied Blockchain Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AGBA Acquisition and Applied Blockchain

The main advantage of trading using opposite AGBA Acquisition and Applied Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGBA Acquisition position performs unexpectedly, Applied Blockchain 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 Applied Blockchain will offset losses from the drop in Applied Blockchain's long position.
The idea behind AGBA Acquisition and Applied Blockchain 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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