Correlation Between DBV Technologies and Claranova

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

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

Diversification Opportunities for DBV Technologies and Claranova

0.23

Correlation Coefficient

DBV Technologies  Claranova

Modest diversification

The 3 months correlation between DBV and Claranova is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding DBV Technologies SA and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and DBV Technologies 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 DBV Technologies SA are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of DBV Technologies i.e., DBV Technologies and Claranova go up and down completely randomly.

Pair Corralation between DBV Technologies and Claranova

Assuming the 90 days trading horizon DBV Technologies SA is expected to under-perform the Claranova. In addition to that, DBV Technologies is 2.08 times more volatile than Claranova SE. It trades about -0.03 of its total potential returns per unit of risk. Claranova SE is currently generating about 0.01 per unit of volatility. If you would invest  149.00  in Claranova SE on September 3, 2024 and sell it today you would lose (2.00) from holding Claranova SE or give up 1.34% of portfolio value over 90 days.

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

DBV Technologies SA  vs.  Claranova SE

DBV Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DBV Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Claranova SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Claranova SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Claranova is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DBV Technologies and Claranova

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

The idea behind DBV Technologies SA and Claranova 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.