Correlation Between Valneva SE and Champions Oncology

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

Diversification Opportunities for Valneva SE and Champions Oncology

-0.49

Correlation Coefficient

Valneva SE  Champions Oncology

Very good diversification

The 3 months correlation between Valneva and Champions is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Champions Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champions Oncology 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 Champions Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champions Oncology has no effect on the direction of Valneva SE i.e., Valneva SE and Champions Oncology go up and down completely randomly.

Pair Corralation between Valneva SE and Champions Oncology

Given the investment horizon of 90 days Valneva SE is expected to generate 400.01 times less return on investment than Champions Oncology. But when comparing it to its historical volatility, Valneva SE ADR is 1.3 times less risky than Champions Oncology. It trades about 0.0 of its potential returns per unit of risk. Champions Oncology is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest  418.00  in Champions Oncology on September 26, 2024 and sell it today you would earn a total of  369.00  from holding Champions Oncology or generate 88.28% 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.  Champions Oncology

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.

Champions Oncology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Champions Oncology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental drivers, Champions Oncology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valneva SE and Champions Oncology

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

The idea behind Valneva SE ADR and Champions Oncology 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 Transaction History module to view history of all your transactions and understand their impact on performance.