Correlation Between Valneva SE and Bruker

Can any of the company-specific risk be diversified away by investing in both Valneva SE and Bruker 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 Bruker 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 Bruker, you can compare the effects of market volatilities on Valneva SE and Bruker 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 Bruker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Bruker.

Diversification Opportunities for Valneva SE and Bruker

-0.53

Correlation Coefficient

Valneva SE  Bruker

Excellent diversification

The 3 months correlation between Valneva and Bruker is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Bruker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruker 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 Bruker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruker has no effect on the direction of Valneva SE i.e., Valneva SE and Bruker go up and down completely randomly.

Pair Corralation between Valneva SE and Bruker

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 2.17 times more return on investment than Bruker. However, Valneva SE is 2.17 times more volatile than Bruker. It trades about 0.13 of its potential returns per unit of risk. Bruker is currently generating about -0.03 per unit of risk. If you would invest  467.00  in Valneva SE ADR on November 20, 2024 and sell it today you would earn a total of  200.00  from holding Valneva SE ADR or generate 42.83% return on investment over 90 days.

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

Valneva SE ADR  vs.  Bruker

Valneva SE ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE ADR are ranked lower than 10 (%) 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.

Bruker

Risk-Adjusted Performance

Weak

Over the last 90 days Bruker has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Bruker is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Valneva SE and Bruker

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

The idea behind Valneva SE ADR and Bruker 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.