Correlation Between Hanesbrands and Valneva SE

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

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

Diversification Opportunities for Hanesbrands and Valneva SE

-0.83

Correlation Coefficient

Hanesbrands  Valneva SE

Pay attention - limited upside

The 3 months correlation between Hanesbrands and Valneva is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE and Hanesbrands 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 Hanesbrands 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 Hanesbrands i.e., Hanesbrands and Valneva SE go up and down completely randomly.

Pair Corralation between Hanesbrands and Valneva SE

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the Valneva SE. But the stock apears to be less risky and, when comparing its historical volatility, Hanesbrands is 1.81 times less risky than Valneva SE. The stock trades about -0.16 of its potential returns per unit of risk. The Valneva SE is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Valneva SE on December 28, 2024 and sell it today you would earn a total of  140.00  from holding Valneva SE or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Hanesbrands  vs.  Valneva SE

Hanesbrands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanesbrands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 fairly inconsistent basic indicators, Valneva SE demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanesbrands and Valneva SE

The main advantage of trading using opposite Hanesbrands and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands 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 Hanesbrands 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.