Correlation Between Nextplat Corp and Valneva SE

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

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

Diversification Opportunities for Nextplat Corp and Valneva SE

0.65

Correlation Coefficient

Nextplat Corp  Valneva SE

Poor diversification

The 3 months correlation between Nextplat and Valneva is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp 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 Nextplat Corp 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 Nextplat Corp 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 Nextplat Corp i.e., Nextplat Corp and Valneva SE go up and down completely randomly.

Pair Corralation between Nextplat Corp and Valneva SE

Given the investment horizon of 90 days Nextplat Corp is expected to generate 1.92 times more return on investment than Valneva SE. However, Nextplat Corp is 1.92 times more volatile than Valneva SE ADR. It trades about -0.09 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.36 per unit of risk. If you would invest  121.00  in Nextplat Corp on August 31, 2024 and sell it today you would lose (36.00) from holding Nextplat Corp or give up 29.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nextplat Corp  vs.  Valneva SE ADR

Nextplat Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextplat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Nextplat Corp and Valneva SE

The main advantage of trading using opposite Nextplat Corp and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp 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 Nextplat Corp 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.