Correlation Between Bassett Furniture and Valneva SE

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

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

Diversification Opportunities for Bassett Furniture and Valneva SE

-0.31

Correlation Coefficient

Bassett Furniture  Valneva SE

Very good diversification

The 3 months correlation between Bassett and Valneva is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR and Bassett Furniture 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 Bassett Furniture Industries 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 ADR has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Valneva SE go up and down completely randomly.

Pair Corralation between Bassett Furniture and Valneva SE

Given the investment horizon of 90 days Bassett Furniture Industries is expected to generate 0.46 times more return on investment than Valneva SE. However, Bassett Furniture Industries is 2.19 times less risky than Valneva SE. It trades about 0.03 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.19 per unit of risk. If you would invest  1,362  in Bassett Furniture Industries on September 26, 2024 and sell it today you would earn a total of  28.00  from holding Bassett Furniture Industries or generate 2.06% return on investment over 90 days.

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

Bassett Furniture Industries  vs.  Valneva SE ADR

Bassett Furniture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bassett Furniture Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Bassett Furniture is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Valneva SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valneva SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bassett Furniture and Valneva SE

The main advantage of trading using opposite Bassett Furniture and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture 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 Bassett Furniture Industries and Valneva SE ADR 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.