Correlation Between Valneva SE and Allient

Can any of the company-specific risk be diversified away by investing in both Valneva SE and Allient 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 Allient 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 Allient, you can compare the effects of market volatilities on Valneva SE and Allient 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 Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Allient.

Diversification Opportunities for Valneva SE and Allient

-0.86

Correlation Coefficient

Valneva SE  Allient

Pay attention - limited upside

The 3 months correlation between Valneva and Allient is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Valneva SE i.e., Valneva SE and Allient go up and down completely randomly.

Pair Corralation between Valneva SE and Allient

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Allient. In addition to that, Valneva SE is 1.03 times more volatile than Allient. It trades about -0.26 of its total potential returns per unit of risk. Allient is currently generating about 0.22 per unit of volatility. If you would invest  1,919  in Allient on September 12, 2024 and sell it today you would earn a total of  816.00  from holding Allient or generate 42.52% return on investment over 90 days.

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

Valneva SE ADR  vs.  Allient

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.

Allient

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valneva SE and Allient

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

The idea behind Valneva SE ADR and Allient 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.