Correlation Between Spring Valley and Glenfarne Merger

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

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

Diversification Opportunities for Spring Valley and Glenfarne Merger

0.0

Correlation Coefficient

Spring Valley  Glenfarne Merger

Pay attention - limited upside

The 3 months correlation between Spring and Glenfarne is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and Glenfarne Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glenfarne Merger Corp and Spring Valley 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 Spring Valley Acquisition are associated (or correlated) with Glenfarne Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glenfarne Merger Corp has no effect on the direction of Spring Valley i.e., Spring Valley and Glenfarne Merger go up and down completely randomly.

Pair Corralation between Spring Valley and Glenfarne Merger

If you would invest (100.00) in Glenfarne Merger Corp on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Glenfarne Merger Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Spring Valley Acquisition  vs.  Glenfarne Merger Corp

Spring Valley Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spring Valley Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Spring Valley is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Glenfarne Merger Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glenfarne Merger Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Glenfarne Merger is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Spring Valley and Glenfarne Merger

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

The idea behind Spring Valley Acquisition and Glenfarne 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.