Correlation Between China Finance and Valneva SE

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

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

Diversification Opportunities for China Finance and Valneva SE

0.0

Correlation Coefficient

China Finance  Valneva SE

Pay attention - limited upside

The 3 months correlation between China and Valneva is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Finance 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 China Finance 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 China Finance 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 China Finance i.e., China Finance and Valneva SE go up and down completely randomly.

Pair Corralation between China Finance and Valneva SE

If you would invest  537.00  in Valneva SE ADR on December 4, 2024 and sell it today you would earn a total of  142.00  from holding Valneva SE ADR or generate 26.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

China Finance  vs.  Valneva SE ADR

China Finance

Risk-Adjusted Performance

Very Weak

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

Valneva SE ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE ADR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Valneva SE displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Finance and Valneva SE

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

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .