Correlation Between Valneva SE and EvoAir Holdings

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

Diversification Opportunities for Valneva SE and EvoAir Holdings

0.0

Correlation Coefficient

Valneva SE  EvoAir Holdings

Pay attention - limited upside

The 3 months correlation between Valneva and EvoAir is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and EvoAir Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EvoAir Holdings 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 EvoAir Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EvoAir Holdings has no effect on the direction of Valneva SE i.e., Valneva SE and EvoAir Holdings go up and down completely randomly.

Pair Corralation between Valneva SE and EvoAir Holdings

If you would invest  404.00  in Valneva SE ADR on December 21, 2024 and sell it today you would earn a total of  321.00  from holding Valneva SE ADR or generate 79.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Valneva SE ADR  vs.  EvoAir Holdings

Valneva SE ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE ADR are ranked lower than 16 (%) 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.

EvoAir Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days EvoAir Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, EvoAir Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Valneva SE and EvoAir Holdings

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

The idea behind Valneva SE ADR and EvoAir Holdings 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.