Correlation Between AGBA Acquisition and Yelp

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

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

Diversification Opportunities for AGBA Acquisition and Yelp

-0.14

Correlation Coefficient

AGBA Acquisition  Yelp

Good diversification

The 3 months correlation between AGBA and Yelp is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding AGBA Acquisition and Yelp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelp Inc and AGBA 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 AGBA Acquisition are associated (or correlated) with Yelp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelp Inc has no effect on the direction of AGBA Acquisition i.e., AGBA Acquisition and Yelp go up and down completely randomly.

Pair Corralation between AGBA Acquisition and Yelp

Given the investment horizon of 90 days AGBA Acquisition is expected to generate 6.69 times more return on investment than Yelp. However, AGBA Acquisition is 6.69 times more volatile than Yelp Inc. It trades about 0.05 of its potential returns per unit of risk. Yelp Inc is currently generating about 0.06 per unit of risk. If you would invest  204.00  in AGBA Acquisition on January 24, 2024 and sell it today you would earn a total of  46.00  from holding AGBA Acquisition or generate 22.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AGBA Acquisition  vs.  Yelp Inc

AGBA Acquisition

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGBA Acquisition are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, AGBA Acquisition sustained solid returns over the last few months and may actually be approaching a breakup point.

Yelp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yelp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with AGBA Acquisition and Yelp

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

The idea behind AGBA Acquisition and Yelp Inc 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.