Correlation Between Valneva SE and MERCK
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By analyzing existing cross correlation between Valneva SE ADR and MERCK INC 595, you can compare the effects of market volatilities on Valneva SE and MERCK 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 MERCK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and MERCK.
Diversification Opportunities for Valneva SE and MERCK
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Valneva and MERCK is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and MERCK INC 595 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCK INC 595 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 MERCK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MERCK INC 595 has no effect on the direction of Valneva SE i.e., Valneva SE and MERCK go up and down completely randomly.
Pair Corralation between Valneva SE and MERCK
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the MERCK. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 13.54 times less risky than MERCK. The stock trades about -0.05 of its potential returns per unit of risk. The MERCK INC 595 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,770 in MERCK INC 595 on September 14, 2024 and sell it today you would lose (95.00) from holding MERCK INC 595 or give up 0.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 86.26% |
Values | Daily Returns |
Valneva SE ADR vs. MERCK INC 595
Performance |
Timeline |
Valneva SE ADR |
MERCK INC 595 |
Valneva SE and MERCK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Valneva SE and MERCK
The main advantage of trading using opposite Valneva SE and MERCK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, MERCK 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 MERCK will offset losses from the drop in MERCK's long position.Valneva SE vs. Puma Biotechnology | Valneva SE vs. Iovance Biotherapeutics | Valneva SE vs. Day One Biopharmaceuticals | Valneva SE vs. Inozyme Pharma |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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