Correlation Between Evolution Mining and Valneva SE

Can any of the company-specific risk be diversified away by investing in both Evolution Mining and Valneva SE 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 Evolution Mining and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evolution Mining and Valneva SE ADR, you can compare the effects of market volatilities on Evolution Mining and Valneva SE 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 Evolution Mining with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Valneva SE.

Diversification Opportunities for Evolution Mining and Valneva SE

0.1

Correlation Coefficient

Evolution Mining  Valneva SE

Average diversification

The 3 months correlation between Evolution and Valneva is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR and Evolution Mining 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 Evolution Mining are associated (or correlated) with Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of Evolution Mining i.e., Evolution Mining and Valneva SE go up and down completely randomly.

Pair Corralation between Evolution Mining and Valneva SE

Assuming the 90 days horizon Evolution Mining is expected to generate 0.81 times more return on investment than Valneva SE. However, Evolution Mining is 1.24 times less risky than Valneva SE. It trades about -0.04 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.15 per unit of risk. If you would invest  317.00  in Evolution Mining on September 24, 2024 and sell it today you would lose (32.00) from holding Evolution Mining or give up 10.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Evolution Mining  vs.  Valneva SE ADR

Evolution Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Valneva SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valneva SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Evolution Mining and Valneva SE

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

The idea behind Evolution Mining and Valneva SE ADR 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.