Correlation Between Treasury Wine and Valneva SE

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

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

Diversification Opportunities for Treasury Wine and Valneva SE

-0.37

Correlation Coefficient

Treasury Wine  Valneva SE

Very good diversification

The 3 months correlation between Treasury and Valneva is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates 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 Treasury Wine 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 Treasury Wine Estates 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 Treasury Wine i.e., Treasury Wine and Valneva SE go up and down completely randomly.

Pair Corralation between Treasury Wine and Valneva SE

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Valneva SE. But the pink sheet apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 2.3 times less risky than Valneva SE. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Valneva SE ADR is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  432.00  in Valneva SE ADR on December 30, 2024 and sell it today you would earn a total of  294.00  from holding Valneva SE ADR or generate 68.06% return on investment over 90 days.

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

Treasury Wine Estates  vs.  Valneva SE ADR

Treasury Wine Estates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treasury Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Treasury Wine and Valneva SE

The main advantage of trading using opposite Treasury Wine and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine 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 Treasury Wine Estates 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.