Correlation Between Malacca Straits and Edoc Acquisition

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

Diversification Opportunities for Malacca Straits and Edoc Acquisition

MalaccaEdocDiversified AwayMalaccaEdocDiversified Away100%
0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Malacca and Edoc is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Malacca Straits Acquisition 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 Malacca Straits 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 Malacca Straits Acquisition 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 Malacca Straits i.e., Malacca Straits and Edoc Acquisition go up and down completely randomly.

Pair Corralation between Malacca Straits and Edoc Acquisition

If you would invest  1.90  in Edoc Acquisition Corp on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Edoc Acquisition Corp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Malacca Straits Acquisition  vs.  Edoc Acquisition Corp

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -60-40-2002040
JavaScript chart by amCharts 3.21.15MLACW ADOCW
       Timeline  
Malacca Straits Acqu 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Malacca Straits Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Malacca Straits is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Edoc Acquisition Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Edoc Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Edoc Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Malacca Straits and Edoc Acquisition Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-149.85-112.23-74.61-36.990.037.0476.03115.01154.0192.99 0.000200.000250.000300.000350.000400.00045
JavaScript chart by amCharts 3.21.15MLACW ADOCW
       Returns  

Pair Trading with Malacca Straits and Edoc Acquisition

The main advantage of trading using opposite Malacca Straits and Edoc Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malacca Straits 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 Malacca Straits Acquisition 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.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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