Correlation Between Valbiotis SAS and Sensorion

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

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

Diversification Opportunities for Valbiotis SAS and Sensorion

0.07

Correlation Coefficient

Valbiotis SAS  Sensorion

Significant diversification

The 3 months correlation between Valbiotis and Sensorion is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Valbiotis SAS and Sensorion SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensorion SA and Valbiotis SAS 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 Valbiotis SAS are associated (or correlated) with Sensorion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensorion SA has no effect on the direction of Valbiotis SAS i.e., Valbiotis SAS and Sensorion go up and down completely randomly.

Pair Corralation between Valbiotis SAS and Sensorion

Assuming the 90 days trading horizon Valbiotis SAS is expected to generate 1.84 times more return on investment than Sensorion. However, Valbiotis SAS is 1.84 times more volatile than Sensorion SA. It trades about 0.12 of its potential returns per unit of risk. Sensorion SA is currently generating about 0.01 per unit of risk. If you would invest  124.00  in Valbiotis SAS on September 25, 2024 and sell it today you would earn a total of  13.00  from holding Valbiotis SAS or generate 10.48% return on investment over 90 days.

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

Valbiotis SAS  vs.  Sensorion SA

Valbiotis SAS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Valbiotis SAS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Valbiotis SAS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sensorion SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sensorion 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 January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Valbiotis SAS and Sensorion

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

The idea behind Valbiotis SAS and Sensorion 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.