Correlation Between Valuence Merger and Moringa Acquisition

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

Diversification Opportunities for Valuence Merger and Moringa Acquisition

-0.12

Correlation Coefficient

Valuence Merger  Moringa Acquisition

Good diversification

The 3 months correlation between Valuence and Moringa is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Valuence Merger Corp and Moringa Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moringa Acquisition 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 Moringa Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moringa Acquisition Corp has no effect on the direction of Valuence Merger i.e., Valuence Merger and Moringa Acquisition go up and down completely randomly.

Pair Corralation between Valuence Merger and Moringa Acquisition

Given the investment horizon of 90 days Valuence Merger Corp is expected to generate 0.03 times more return on investment than Moringa Acquisition. However, Valuence Merger Corp is 36.87 times less risky than Moringa Acquisition. It trades about 0.05 of its potential returns per unit of risk. Moringa Acquisition Corp is currently generating about -0.08 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	67.04%
Values	Daily Returns

Valuence Merger Corp  vs.  Moringa Acquisition Corp

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.

Moringa Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Valuence Merger and Moringa Acquisition

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

The idea behind Valuence Merger Corp and Moringa 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.

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 the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.