Correlation Between Aelis Farma and Valneva SE

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

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

Diversification Opportunities for Aelis Farma and Valneva SE

-0.34

Correlation Coefficient

Aelis Farma  Valneva SE

Very good diversification

The 3 months correlation between Aelis and Valneva is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aelis Farma SA and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE and Aelis Farma 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 Aelis Farma SA 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 Aelis Farma i.e., Aelis Farma and Valneva SE go up and down completely randomly.

Pair Corralation between Aelis Farma and Valneva SE

Assuming the 90 days trading horizon Aelis Farma SA is expected to under-perform the Valneva SE. In addition to that, Aelis Farma is 2.39 times more volatile than Valneva SE. It trades about -0.02 of its total potential returns per unit of risk. Valneva SE is currently generating about 0.18 per unit of volatility. If you would invest  210.00  in Valneva SE on December 28, 2024 and sell it today you would earn a total of  125.00  from holding Valneva SE or generate 59.52% return on investment over 90 days.

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

Aelis Farma SA  vs.  Valneva SE

Aelis Farma SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aelis Farma SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Valneva SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Valneva SE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aelis Farma and Valneva SE

The main advantage of trading using opposite Aelis Farma and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aelis Farma 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 Aelis Farma SA 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.