Correlation Between Valuence Merger and Lionsgate Studios

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

Diversification Opportunities for Valuence Merger and Lionsgate Studios

0.43

Correlation Coefficient

Valuence Merger  Lionsgate Studios

Very weak diversification

The 3 months correlation between Valuence and Lionsgate is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Valuence Merger Corp and Lionsgate Studios Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionsgate Studios Corp 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 Lionsgate Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionsgate Studios Corp has no effect on the direction of Valuence Merger i.e., Valuence Merger and Lionsgate Studios go up and down completely randomly.

Pair Corralation between Valuence Merger and Lionsgate Studios

Given the investment horizon of 90 days Valuence Merger is expected to generate 2.74 times less return on investment than Lionsgate Studios. But when comparing it to its historical volatility, Valuence Merger Corp is 12.08 times less risky than Lionsgate Studios. It trades about 0.12 of its potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  726.00  in Lionsgate Studios Corp on December 30, 2024 and sell it today you would earn a total of  17.00  from holding Lionsgate Studios Corp or generate 2.34% return on investment over 90 days.

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

Valuence Merger Corp  vs.  Lionsgate Studios 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.

Lionsgate Studios Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lionsgate Studios is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Valuence Merger and Lionsgate Studios

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

The idea behind Valuence Merger Corp and Lionsgate Studios 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.