Correlation Between Main Street and Valuence Merger
Can any of the company-specific risk be diversified away by investing in both Main Street 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 Main Street and Valuence Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Capital and Valuence Merger Corp, you can compare the effects of market volatilities on Main Street 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 Main Street with a short position of Valuence Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Valuence Merger.
Diversification Opportunities for Main Street and Valuence Merger
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Main and Valuence is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital 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 Main Street 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 Main Street Capital 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 Main Street i.e., Main Street and Valuence Merger go up and down completely randomly.
Pair Corralation between Main Street and Valuence Merger
Given the investment horizon of 90 days Main Street Capital is expected to generate 0.56 times more return on investment than Valuence Merger. However, Main Street Capital is 1.79 times less risky than Valuence Merger. It trades about 0.13 of its potential returns per unit of risk. Valuence Merger Corp is currently generating about -0.02 per unit of risk. If you would invest 4,762 in Main Street Capital on September 1, 2024 and sell it today you would earn a total of 785.00 from holding Main Street Capital or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Main Street Capital vs. Valuence Merger Corp
Performance |
| Timeline |
| Main Street Capital |
| Valuence Merger Corp |
Main Street and Valuence Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Valuence Merger
The main advantage of trading using opposite Main Street and Valuence Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street 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.| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
| Valuence Merger vs. Weyco Group | Valuence Merger vs. Lipocine | Valuence Merger vs. Centessa Pharmaceuticals PLC | Valuence Merger vs. Mannatech Incorporated |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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