Correlation Between Mercurity Fintech and AGBA Old

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

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

Diversification Opportunities for Mercurity Fintech and AGBA Old

-0.45

Correlation Coefficient

Mercurity Fintech  AGBA Old

Very good diversification

The 3 months correlation between Mercurity and AGBA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mercurity Fintech Holding and AGBA Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGBA Old and Mercurity Fintech 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 Mercurity Fintech Holding are associated (or correlated) with AGBA Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGBA Old has no effect on the direction of Mercurity Fintech i.e., Mercurity Fintech and AGBA Old go up and down completely randomly.

Pair Corralation between Mercurity Fintech and AGBA Old

Considering the 90-day investment horizon Mercurity Fintech is expected to generate 2.88 times less return on investment than AGBA Old. But when comparing it to its historical volatility, Mercurity Fintech Holding is 5.05 times less risky than AGBA Old. It trades about 0.09 of its potential returns per unit of risk. AGBA Old is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  844.00  in AGBA Old on October 10, 2024 and sell it today you would lose (284.00) from holding AGBA Old or give up 33.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.16%
Values	Daily Returns

Mercurity Fintech Holding  vs.  AGBA Old

Mercurity Fintech Holding

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mercurity Fintech Holding are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting technical and fundamental indicators, Mercurity Fintech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

AGBA Old

Risk-Adjusted Performance

0 of 100

Market Crasher

Over the last 90 days AGBA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat inconsistent fundamental drivers, AGBA Old sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mercurity Fintech and AGBA Old

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

The idea behind Mercurity Fintech Holding and AGBA Old 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.