Correlation Between Valneva SE and Biodexa Pharmaceticals
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Biodexa Pharmaceticals 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 Valneva SE and Biodexa Pharmaceticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valneva SE ADR and Biodexa Pharmaceticals, you can compare the effects of market volatilities on Valneva SE and Biodexa Pharmaceticals 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 Valneva SE with a short position of Biodexa Pharmaceticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Biodexa Pharmaceticals.
Diversification Opportunities for Valneva SE and Biodexa Pharmaceticals
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valneva and Biodexa is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Biodexa Pharmaceticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodexa Pharmaceticals and Valneva SE 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 Valneva SE ADR are associated (or correlated) with Biodexa Pharmaceticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodexa Pharmaceticals has no effect on the direction of Valneva SE i.e., Valneva SE and Biodexa Pharmaceticals go up and down completely randomly.
Pair Corralation between Valneva SE and Biodexa Pharmaceticals
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.32 times more return on investment than Biodexa Pharmaceticals. However, Valneva SE ADR is 3.14 times less risky than Biodexa Pharmaceticals. It trades about -0.01 of its potential returns per unit of risk. Biodexa Pharmaceticals is currently generating about -0.06 per unit of risk. If you would invest 1,095 in Valneva SE ADR on December 5, 2024 and sell it today you would lose (413.00) from holding Valneva SE ADR or give up 37.72% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Valneva SE ADR vs. Biodexa Pharmaceticals
Performance |
Timeline |
Valneva SE ADR |
Biodexa Pharmaceticals |
Valneva SE and Biodexa Pharmaceticals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Valneva SE and Biodexa Pharmaceticals
The main advantage of trading using opposite Valneva SE and Biodexa Pharmaceticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Biodexa Pharmaceticals 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 Biodexa Pharmaceticals will offset losses from the drop in Biodexa Pharmaceticals' long position.Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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