Correlation Between PowerUp Acquisition and Valuence Merger

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

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

Diversification Opportunities for PowerUp Acquisition and Valuence Merger

0.31

Correlation Coefficient

PowerUp Acquisition  Valuence Merger

Weak diversification

The 3 months correlation between PowerUp and Valuence is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp 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 PowerUp Acquisition 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 PowerUp Acquisition Corp 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 PowerUp Acquisition i.e., PowerUp Acquisition and Valuence Merger go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and Valuence Merger

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 2.34 times more return on investment than Valuence Merger. However, PowerUp Acquisition is 2.34 times more volatile than Valuence Merger Corp. It trades about 0.06 of its potential returns per unit of risk. Valuence Merger Corp is currently generating about 0.0 per unit of risk. If you would invest  4.00  in PowerUp Acquisition Corp on September 16, 2024 and sell it today you would lose (1.01) from holding PowerUp Acquisition Corp or give up 25.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	50.0%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  Valuence Merger Corp

PowerUp Acquisition Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PowerUp Acquisition Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, PowerUp Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of fairly stable basic indicators, Valuence Merger is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with PowerUp Acquisition and Valuence Merger

The main advantage of trading using opposite PowerUp Acquisition and Valuence Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PowerUp Acquisition 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 PowerUp Acquisition Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.