Correlation Between Kairous Acquisition and AGM Group

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

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

Diversification Opportunities for Kairous Acquisition and AGM Group

-0.46

Correlation Coefficient

Kairous Acquisition  AGM Group

Very good diversification

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

Pair Corralation between Kairous Acquisition and AGM Group

Assuming the 90 days horizon Kairous Acquisition Corp is expected to under-perform the AGM Group. But the stock apears to be less risky and, when comparing its historical volatility, Kairous Acquisition Corp is 1.43 times less risky than AGM Group. The stock trades about -0.3 of its potential returns per unit of risk. The AGM Group Holdings is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  173.00  in AGM Group Holdings on September 23, 2024 and sell it today you would lose (23.00) from holding AGM Group Holdings or give up 13.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	52.38%
Values	Daily Returns

Kairous Acquisition Corp  vs.  AGM Group Holdings

Kairous Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kairous Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal essential indicators, Kairous Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

AGM Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGM Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, AGM Group is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kairous Acquisition and AGM Group

The main advantage of trading using opposite Kairous Acquisition and AGM Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kairous Acquisition position performs unexpectedly, AGM Group 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 AGM Group will offset losses from the drop in AGM Group's long position.

The idea behind Kairous Acquisition Corp and AGM Group Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.