Correlation Between Edify Acquisition and Marlin Technology

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

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

Diversification Opportunities for Edify Acquisition and Marlin Technology

0.05
  Correlation Coefficient
Edify Acquisition Corp
Marlin Technology Corp

Significant diversification

The 3 months correlation between Edify and Marlin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Edify Acquisition Corp and Marlin Technology Corp in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Marlin Technology Corp and Edify 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 Edify Acquisition Corp are associated (or correlated) with Marlin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marlin Technology Corp has no effect on the direction of Edify Acquisition i.e., Edify Acquisition and Marlin Technology go up and down completely randomly.

Pair Corralation between Edify Acquisition and Marlin Technology

Assuming the 90 days horizon Edify Acquisition Corp is expected to under-perform the Marlin Technology. In addition to that, Edify Acquisition is 1.37 times more volatile than Marlin Technology Corp. It trades about -0.01 of its total potential returns per unit of risk. Marlin Technology Corp is currently generating about 0.01 per unit of volatility. If you would invest  973.00  in Marlin Technology Corp on July 25, 2021 and sell it today you would earn a total of  4.00  from holding Marlin Technology Corp or generate 0.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy81.73%
ValuesDaily Returns

Edify Acquisition Corp  vs.  Marlin Technology Corp

 Performance (%) 
      Timeline 
Edify Acquisition Corp 
 Edify Performance
0 of 100
Over the last 90 days Edify Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Edify Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Edify Price Channel

Marlin Technology Corp 
 Marlin Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Marlin Technology Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, Marlin Technology is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Marlin Price Channel

Edify Acquisition and Marlin Technology Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Edify Acquisition and Marlin Technology

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

Edify Acquisition Corp

Pair trading matchups for Edify Acquisition

The idea behind Edify Acquisition Corp and Marlin Technology 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.

Marlin Technology Corp

Pair trading matchups for Marlin Technology

Check out your portfolio center. 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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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