Correlation Between Resolute Forest and Valneva SE

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

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

Diversification Opportunities for Resolute Forest and Valneva SE

-0.63

Correlation Coefficient

Resolute Forest  Valneva SE

Excellent diversification

The 3 months correlation between Resolute and Valneva is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Resolute Forest Products 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 Resolute Forest 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 Resolute Forest Products 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 Resolute Forest i.e., Resolute Forest and Valneva SE go up and down completely randomly.

Pair Corralation between Resolute Forest and Valneva SE

If you would invest  2,192  in Resolute Forest Products on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Resolute Forest Products or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Resolute Forest Products  vs.  Valneva SE ADR

Resolute Forest Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Resolute Forest Products has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Resolute Forest is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail 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 Resolute Forest and Valneva SE

The main advantage of trading using opposite Resolute Forest and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resolute Forest 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 Resolute Forest Products 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.