Correlation Between Aurora Acquisition and AGBA Acquisition

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

By analyzing existing cross correlation between Aurora Acquisition Corp and AGBA Acquisition Limited, you can compare the effects of market volatilities on Aurora Acquisition 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 Aurora Acquisition with a short position of AGBA Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Acquisition and AGBA Acquisition.

Diversification Opportunities for Aurora Acquisition and AGBA Acquisition

-0.21

Correlation Coefficient

Aurora Acquisition  AGBA Acquisition

Very good diversification

The 3 months correlation between Aurora and AGBA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Acquisition Corp and AGBA Acquisition Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGBA Acquisition and Aurora 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 Aurora Acquisition Corp 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 Aurora Acquisition i.e., Aurora Acquisition and AGBA Acquisition go up and down completely randomly.

Pair Corralation between Aurora Acquisition and AGBA Acquisition

If you would invest  21.00  in AGBA Acquisition Limited on September 16, 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 Against
Strength	Insignificant
Accuracy	4.17%
Values	Daily Returns

Aurora Acquisition Corp  vs.  AGBA Acquisition Limited

Aurora Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Aurora Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

AGBA Acquisition

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days AGBA Acquisition Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, AGBA Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Acquisition and AGBA Acquisition

The main advantage of trading using opposite Aurora Acquisition and AGBA Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Acquisition 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 Aurora Acquisition Corp 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.