Correlation Between DBV Technologies and Inventiva

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

By analyzing existing cross correlation between DBV Technologies SA and Inventiva SA, you can compare the effects of market volatilities on DBV Technologies and Inventiva 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 DBV Technologies with a short position of Inventiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBV Technologies and Inventiva.

Diversification Opportunities for DBV Technologies and Inventiva

-0.07

Correlation Coefficient

DBV Technologies  Inventiva

Good diversification

The 3 months correlation between DBV and Inventiva is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding DBV Technologies SA and Inventiva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventiva SA and DBV Technologies 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 DBV Technologies SA are associated (or correlated) with Inventiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventiva SA has no effect on the direction of DBV Technologies i.e., DBV Technologies and Inventiva go up and down completely randomly.

Pair Corralation between DBV Technologies and Inventiva

Assuming the 90 days trading horizon DBV Technologies is expected to generate 22.45 times less return on investment than Inventiva. But when comparing it to its historical volatility, DBV Technologies SA is 1.18 times less risky than Inventiva. It trades about 0.0 of its potential returns per unit of risk. Inventiva SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Inventiva SA on September 12, 2024 and sell it today you would earn a total of  27.00  from holding Inventiva SA or generate 12.86% return on investment over 90 days.

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

DBV Technologies SA  vs.  Inventiva SA

DBV Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Inventiva SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inventiva SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inventiva sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DBV Technologies and Inventiva

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

The idea behind DBV Technologies SA and Inventiva SA 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.