Correlation Between Valuence Merger and Marblegate Acquisition

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

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

Diversification Opportunities for Valuence Merger and Marblegate Acquisition

0.26

Correlation Coefficient

Valuence Merger  Marblegate Acquisition

Modest diversification

The 3 months correlation between Valuence and Marblegate is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Valuence Merger Corp and Marblegate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marblegate Acquisition and Valuence Merger 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 Valuence Merger Corp are associated (or correlated) with Marblegate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marblegate Acquisition has no effect on the direction of Valuence Merger i.e., Valuence Merger and Marblegate Acquisition go up and down completely randomly.

Pair Corralation between Valuence Merger and Marblegate Acquisition

Given the investment horizon of 90 days Valuence Merger is expected to generate 115.62 times less return on investment than Marblegate Acquisition. But when comparing it to its historical volatility, Valuence Merger Corp is 98.69 times less risky than Marblegate Acquisition. It trades about 0.12 of its potential returns per unit of risk. Marblegate Acquisition Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,098  in Marblegate Acquisition Corp on December 30, 2024 and sell it today you would earn a total of  2,902  from holding Marblegate Acquisition Corp or generate 264.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Valuence Merger Corp  vs.  Marblegate Acquisition Corp

Valuence Merger Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Valuence Merger Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Valuence Merger is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Marblegate Acquisition

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marblegate Acquisition Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Marblegate Acquisition exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valuence Merger and Marblegate Acquisition

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

The idea behind Valuence Merger Corp and Marblegate Acquisition 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.