Correlation Between Addiko Bank and Valneva SE

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

By analyzing existing cross correlation between Addiko Bank AG and Valneva SE, you can compare the effects of market volatilities on Addiko Bank and Valneva SE 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 Addiko Bank with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addiko Bank and Valneva SE.

Diversification Opportunities for Addiko Bank and Valneva SE

-0.05

Correlation Coefficient

Addiko Bank  Valneva SE

Good diversification

The 3 months correlation between Addiko and Valneva is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Addiko Bank AG and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE and Addiko Bank 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 Addiko Bank AG are associated (or correlated) with Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE has no effect on the direction of Addiko Bank i.e., Addiko Bank and Valneva SE go up and down completely randomly.

Pair Corralation between Addiko Bank and Valneva SE

Assuming the 90 days trading horizon Addiko Bank AG is expected to under-perform the Valneva SE. But the stock apears to be less risky and, when comparing its historical volatility, Addiko Bank AG is 3.53 times less risky than Valneva SE. The stock trades about -0.01 of its potential returns per unit of risk. The Valneva SE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Valneva SE on December 30, 2024 and sell it today you would earn a total of  115.00  from holding Valneva SE or generate 54.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Addiko Bank AG  vs.  Valneva SE

Addiko Bank AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Addiko Bank AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Addiko Bank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Valneva SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Valneva SE demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Addiko Bank and Valneva SE

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

The idea behind Addiko Bank AG and Valneva SE 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.