Correlation Between East Resources and AGBA Acquisition
Can any of the company-specific risk be diversified away by investing in both East Resources 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 East Resources and AGBA Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Resources Acquisition and AGBA Acquisition Limited, you can compare the effects of market volatilities on East Resources 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 East Resources with a short position of AGBA Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Resources and AGBA Acquisition.
Diversification Opportunities for East Resources and AGBA Acquisition
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between East and AGBA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding East Resources 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 East Resources 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 East Resources 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 East Resources i.e., East Resources and AGBA Acquisition go up and down completely randomly.
Pair Corralation between East Resources and AGBA Acquisition
If you would invest 21.00 in AGBA Acquisition Limited on August 30, 2024 and sell it today you would earn a total of 0.00 from holding AGBA Acquisition Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Resources Acquisition vs. AGBA Acquisition Limited
Performance |
| Timeline |
| East Resources Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AGBA Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
East Resources and AGBA Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Resources and AGBA Acquisition
The main advantage of trading using opposite East Resources and AGBA Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Resources 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 East Resources 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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