Correlation Between Valneva SE and National Vision

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

Diversification Opportunities for Valneva SE and National Vision

-0.58

Correlation Coefficient

Valneva SE  National Vision

Excellent diversification

The 3 months correlation between Valneva and National is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and National Vision Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Vision 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 National Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Vision Holdings has no effect on the direction of Valneva SE i.e., Valneva SE and National Vision go up and down completely randomly.

Pair Corralation between Valneva SE and National Vision

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 1.03 times more return on investment than National Vision. However, Valneva SE is 1.03 times more volatile than National Vision Holdings. It trades about -0.04 of its potential returns per unit of risk. National Vision Holdings is currently generating about -0.06 per unit of risk. If you would invest  1,288  in Valneva SE ADR on October 5, 2024 and sell it today you would lose (816.00) from holding Valneva SE ADR or give up 63.35% 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.  National Vision Holdings

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 weak performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

National Vision Holdings

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, National Vision may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Valneva SE and National Vision

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

The idea behind Valneva SE ADR and National Vision 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.