Correlation Between Valuence Merger and Kernel Group

Can any of the company-specific risk be diversified away by investing in both Valuence Merger and Kernel Group 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 Kernel Group 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 Kernel Group Holdings, you can compare the effects of market volatilities on Valuence Merger and Kernel Group 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 Kernel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valuence Merger and Kernel Group.

Diversification Opportunities for Valuence Merger and Kernel Group

-0.06

Correlation Coefficient

Valuence Merger  Kernel Group

Good diversification

The 3 months correlation between Valuence and Kernel is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Valuence Merger Corp and Kernel Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kernel Group Holdings 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 Kernel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kernel Group Holdings has no effect on the direction of Valuence Merger i.e., Valuence Merger and Kernel Group go up and down completely randomly.

Pair Corralation between Valuence Merger and Kernel Group

Given the investment horizon of 90 days Valuence Merger Corp is expected to generate 0.19 times more return on investment than Kernel Group. However, Valuence Merger Corp is 5.4 times less risky than Kernel Group. It trades about 0.05 of its potential returns per unit of risk. Kernel Group Holdings is currently generating about -0.01 per unit of risk. If you would invest  1,122  in Valuence Merger Corp on October 3, 2024 and sell it today you would earn a total of  30.00  from holding Valuence Merger Corp or generate 2.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.17%
Values	Daily Returns

Valuence Merger Corp  vs.  Kernel Group Holdings

Valuence Merger Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valuence Merger Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Valuence Merger is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Kernel Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kernel Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kernel Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Valuence Merger and Kernel Group

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

The idea behind Valuence Merger Corp and Kernel Group Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.