Correlation Between Valneva SE and Collplant Biotechnologies

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

Diversification Opportunities for Valneva SE and Collplant Biotechnologies

0.47

Correlation Coefficient

Valneva SE  Collplant Biotechnologies

Very weak diversification

The 3 months correlation between Valneva and Collplant is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Collplant Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collplant Biotechnologies 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 Collplant Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collplant Biotechnologies has no effect on the direction of Valneva SE i.e., Valneva SE and Collplant Biotechnologies go up and down completely randomly.

Pair Corralation between Valneva SE and Collplant Biotechnologies

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Collplant Biotechnologies. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.07 times less risky than Collplant Biotechnologies. The stock trades about -0.27 of its potential returns per unit of risk. The Collplant Biotechnologies is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  483.00  in Collplant Biotechnologies on September 12, 2024 and sell it today you would lose (92.00) from holding Collplant Biotechnologies or give up 19.05% of portfolio value over 90 days.

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

Valneva SE ADR  vs.  Collplant Biotechnologies

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.

Collplant Biotechnologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Collplant Biotechnologies 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 technical and fundamental 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.

Pair Trading with Valneva SE and Collplant Biotechnologies

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

The idea behind Valneva SE ADR and Collplant Biotechnologies 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.