Correlation Between AGBA Acquisition and Edoc Acquisition
Can any of the company-specific risk be diversified away by investing in both AGBA Acquisition and Edoc 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 AGBA Acquisition and Edoc Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGBA Acquisition Limited and Edoc Acquisition Corp, you can compare the effects of market volatilities on AGBA Acquisition and Edoc 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 AGBA Acquisition with a short position of Edoc Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGBA Acquisition and Edoc Acquisition.
Diversification Opportunities for AGBA Acquisition and Edoc Acquisition
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGBA and Edoc is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AGBA Acquisition Limited and Edoc Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edoc Acquisition Corp 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 Limited are associated (or correlated) with Edoc Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edoc Acquisition Corp has no effect on the direction of AGBA Acquisition i.e., AGBA Acquisition and Edoc Acquisition go up and down completely randomly.
Pair Corralation between AGBA Acquisition and Edoc Acquisition
Assuming the 90 days horizon AGBA Acquisition Limited is expected to generate 194.57 times more return on investment than Edoc Acquisition. However, AGBA Acquisition is 194.57 times more volatile than Edoc Acquisition Corp. It trades about 0.11 of its potential returns per unit of risk. Edoc Acquisition Corp is currently generating about 0.16 per unit of risk. If you would invest 8.50 in AGBA Acquisition Limited on August 30, 2024 and sell it today you would earn a total of 12.50 from holding AGBA Acquisition Limited or generate 147.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 43.02% |
| Values | Daily Returns |
AGBA Acquisition Limited vs. Edoc Acquisition Corp
Performance |
| Timeline |
| AGBA Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Edoc Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AGBA Acquisition and Edoc Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGBA Acquisition and Edoc Acquisition
The main advantage of trading using opposite AGBA Acquisition and Edoc Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGBA Acquisition position performs unexpectedly, Edoc 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 Edoc Acquisition will offset losses from the drop in Edoc Acquisition's long position.The idea behind AGBA Acquisition Limited and Edoc Acquisition Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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