Correlation Between Valneva SE and Arbutus Biopharma

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

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

Diversification Opportunities for Valneva SE and Arbutus Biopharma

0.78

Correlation Coefficient

Valneva SE  Arbutus Biopharma

Poor diversification

The 3 months correlation between Valneva and Arbutus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Arbutus Biopharma Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbutus Biopharma Corp and Valneva SE 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 Valneva SE ADR are associated (or correlated) with Arbutus Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbutus Biopharma Corp has no effect on the direction of Valneva SE i.e., Valneva SE and Arbutus Biopharma go up and down completely randomly.

Pair Corralation between Valneva SE and Arbutus Biopharma

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Arbutus Biopharma. In addition to that, Valneva SE is 1.26 times more volatile than Arbutus Biopharma Corp. It trades about -0.11 of its total potential returns per unit of risk. Arbutus Biopharma Corp is currently generating about 0.09 per unit of volatility. If you would invest  205.00  in Arbutus Biopharma Corp on September 4, 2024 and sell it today you would earn a total of  141.00  from holding Arbutus Biopharma Corp or generate 68.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Valneva SE ADR  vs.  Arbutus Biopharma Corp

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Arbutus Biopharma Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arbutus Biopharma Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Valneva SE and Arbutus Biopharma

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

The idea behind Valneva SE ADR and Arbutus Biopharma 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.