Correlation Between IFIN Old and Valuence Merger

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

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

Diversification Opportunities for IFIN Old and Valuence Merger

0.0

Correlation Coefficient

IFIN Old  Valuence Merger

Pay attention - limited upside

The 3 months correlation between IFIN and Valuence is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IFIN Old and Valuence Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valuence Merger Corp and IFIN Old 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 IFIN Old are associated (or correlated) with Valuence Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valuence Merger Corp has no effect on the direction of IFIN Old i.e., IFIN Old and Valuence Merger go up and down completely randomly.

Pair Corralation between IFIN Old and Valuence Merger

Given the investment horizon of 90 days IFIN Old is expected to under-perform the Valuence Merger. But the stock apears to be less risky and, when comparing its historical volatility, IFIN Old is 15.11 times less risky than Valuence Merger. The stock trades about -0.15 of its potential returns per unit of risk. The Valuence Merger Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Valuence Merger Corp on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Valuence Merger Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	73.42%
Values	Daily Returns

IFIN Old  vs.  Valuence Merger Corp

IFIN Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IFIN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, IFIN Old is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Valuence Merger Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valuence Merger Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Valuence Merger showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IFIN Old and Valuence Merger

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

The idea behind IFIN Old and Valuence Merger 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.