Correlation Between Broadpeak and Valneva SE

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

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

Diversification Opportunities for Broadpeak and Valneva SE

0.69

Correlation Coefficient

Broadpeak  Valneva SE

Poor diversification

The 3 months correlation between Broadpeak and Valneva is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE and Broadpeak 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 Broadpeak 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 Broadpeak i.e., Broadpeak and Valneva SE go up and down completely randomly.

Pair Corralation between Broadpeak and Valneva SE

Assuming the 90 days trading horizon Broadpeak is expected to generate 2.2 times less return on investment than Valneva SE. But when comparing it to its historical volatility, Broadpeak SA is 1.22 times less risky than Valneva SE. It trades about 0.1 of its potential returns per unit of risk. Valneva SE is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  214.00  in Valneva SE on December 26, 2024 and sell it today you would earn a total of  118.00  from holding Valneva SE or generate 55.14% return on investment over 90 days.

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

Broadpeak SA  vs.  Valneva SE

Broadpeak SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadpeak SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Broadpeak reported solid returns over the last few months and may actually be approaching a breakup point.

Valneva SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE are ranked lower than 13 (%) 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 Broadpeak and Valneva SE

The main advantage of trading using opposite Broadpeak and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadpeak 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 Broadpeak 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 Stocks Directory module to find actively traded stocks across global markets.