Correlation Between Valneva SE and 22966RAH9

Can any of the company-specific risk be diversified away by investing in both Valneva SE and 22966RAH9 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 22966RAH9 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 CUBE 225 15 DEC 28, you can compare the effects of market volatilities on Valneva SE and 22966RAH9 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 22966RAH9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and 22966RAH9.

Diversification Opportunities for Valneva SE and 22966RAH9

0.6

Correlation Coefficient

Valneva SE  22966RAH9

Poor diversification

The 3 months correlation between Valneva and 22966RAH9 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and CUBE 225 15 DEC 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CUBE 225 15 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 22966RAH9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CUBE 225 15 has no effect on the direction of Valneva SE i.e., Valneva SE and 22966RAH9 go up and down completely randomly.

Pair Corralation between Valneva SE and 22966RAH9

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the 22966RAH9. In addition to that, Valneva SE is 2.15 times more volatile than CUBE 225 15 DEC 28. It trades about -0.26 of its total potential returns per unit of risk. CUBE 225 15 DEC 28 is currently generating about -0.06 per unit of volatility. If you would invest  9,220  in CUBE 225 15 DEC 28 on September 12, 2024 and sell it today you would lose (438.00) from holding CUBE 225 15 DEC 28 or give up 4.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	85.94%
Values	Daily Returns

Valneva SE ADR  vs.  CUBE 225 15 DEC 28

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.

CUBE 225 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CUBE 225 15 DEC 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 22966RAH9 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Valneva SE and 22966RAH9

The main advantage of trading using opposite Valneva SE and 22966RAH9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, 22966RAH9 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 22966RAH9 will offset losses from the drop in 22966RAH9's long position.

The idea behind Valneva SE ADR and CUBE 225 15 DEC 28 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.