Correlation Between Valneva SE and Bristol Myers

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

Diversification Opportunities for Valneva SE and Bristol Myers

-0.88

Correlation Coefficient

Valneva SE  Bristol Myers

Pay attention - limited upside

The 3 months correlation between Valneva and Bristol is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Bristol Myers Squibb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristol Myers Squibb 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 Bristol Myers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristol Myers Squibb has no effect on the direction of Valneva SE i.e., Valneva SE and Bristol Myers go up and down completely randomly.

Pair Corralation between Valneva SE and Bristol Myers

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Bristol Myers. In addition to that, Valneva SE is 1.3 times more volatile than Bristol Myers Squibb. It trades about -0.36 of its total potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.15 per unit of volatility. If you would invest  4,940  in Bristol Myers Squibb on August 30, 2024 and sell it today you would earn a total of  987.00  from holding Bristol Myers Squibb or generate 19.98% 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.  Bristol Myers Squibb

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 weak 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.

Bristol Myers Squibb

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Bristol Myers showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valneva SE and Bristol Myers

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

The idea behind Valneva SE ADR and Bristol Myers Squibb 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.