Correlation Between Valneva SE and Hamilton Insurance

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

Diversification Opportunities for Valneva SE and Hamilton Insurance

0.05

Correlation Coefficient

Valneva SE  Hamilton Insurance

Significant diversification

The 3 months correlation between Valneva and Hamilton is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, 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 Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Valneva SE i.e., Valneva SE and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Valneva SE and Hamilton Insurance

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Hamilton Insurance. In addition to that, Valneva SE is 1.24 times more volatile than Hamilton Insurance Group,. It trades about -0.34 of its total potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.0 per unit of volatility. If you would invest  1,933  in Hamilton Insurance Group, on September 5, 2024 and sell it today you would lose (25.00) from holding Hamilton Insurance Group, or give up 1.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Valneva SE ADR  vs.  Hamilton Insurance Group,

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.

Hamilton Insurance Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hamilton Insurance Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Hamilton Insurance is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Valneva SE and Hamilton Insurance

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

The idea behind Valneva SE ADR and Hamilton Insurance Group, 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.