Correlation Between Valneva SE and Lucid

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

Diversification Opportunities for Valneva SE and Lucid

0.54

Correlation Coefficient

Valneva SE  Lucid

Very weak diversification

The 3 months correlation between Valneva and Lucid is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid 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 Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Valneva SE i.e., Valneva SE and Lucid go up and down completely randomly.

Pair Corralation between Valneva SE and Lucid

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Lucid. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.41 times less risky than Lucid. The stock trades about -0.05 of its potential returns per unit of risk. The Lucid Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  625.00  in Lucid Group on September 26, 2024 and sell it today you would lose (315.00) from holding Lucid Group or give up 50.4% 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.  Lucid 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 unsteady 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.

Lucid Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucid Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Lucid is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Valneva SE and Lucid

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

The idea behind Valneva SE ADR and Lucid 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.