Correlation Between Valneva SE and Medincell

Can any of the company-specific risk be diversified away by investing in both Valneva SE and Medincell 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 Medincell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Valneva SE and Medincell SA, you can compare the effects of market volatilities on Valneva SE and Medincell 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 Medincell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Medincell.

Diversification Opportunities for Valneva SE and Medincell

-0.59

Correlation Coefficient

Valneva SE  Medincell

Excellent diversification

The 3 months correlation between Valneva and Medincell is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE and Medincell SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medincell SA 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 are associated (or correlated) with Medincell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medincell SA has no effect on the direction of Valneva SE i.e., Valneva SE and Medincell go up and down completely randomly.

Pair Corralation between Valneva SE and Medincell

Assuming the 90 days trading horizon Valneva SE is expected to under-perform the Medincell. In addition to that, Valneva SE is 1.03 times more volatile than Medincell SA. It trades about -0.2 of its total potential returns per unit of risk. Medincell SA is currently generating about 0.01 per unit of volatility. If you would invest  1,640  in Medincell SA on September 16, 2024 and sell it today you would lose (10.00) from holding Medincell SA or give up 0.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Valneva SE  vs.  Medincell SA

Valneva SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valneva SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Medincell SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medincell SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Medincell is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Valneva SE and Medincell

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

The idea behind Valneva SE and Medincell SA 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.