Correlation Between Valneva SE and 571903BH5

Can any of the company-specific risk be diversified away by investing in both Valneva SE and 571903BH5 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 571903BH5 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 MAR 275 15 OCT 33, you can compare the effects of market volatilities on Valneva SE and 571903BH5 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 571903BH5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and 571903BH5.

Diversification Opportunities for Valneva SE and 571903BH5

0.36

Correlation Coefficient

Valneva SE  571903BH5

Weak diversification

The 3 months correlation between Valneva and 571903BH5 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and MAR 275 15 OCT 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAR 275 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 571903BH5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAR 275 15 has no effect on the direction of Valneva SE i.e., Valneva SE and 571903BH5 go up and down completely randomly.

Pair Corralation between Valneva SE and 571903BH5

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the 571903BH5. In addition to that, Valneva SE is 4.13 times more volatile than MAR 275 15 OCT 33. It trades about -0.15 of its total potential returns per unit of risk. MAR 275 15 OCT 33 is currently generating about 0.03 per unit of volatility. If you would invest  8,568  in MAR 275 15 OCT 33 on September 27, 2024 and sell it today you would earn a total of  103.00  from holding MAR 275 15 OCT 33 or generate 1.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Valneva SE ADR  vs.  MAR 275 15 OCT 33

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.

MAR 275 15

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MAR 275 15 OCT 33 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 571903BH5 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Valneva SE and 571903BH5

The main advantage of trading using opposite Valneva SE and 571903BH5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, 571903BH5 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 571903BH5 will offset losses from the drop in 571903BH5's long position.

The idea behind Valneva SE ADR and MAR 275 15 OCT 33 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.