Correlation Between Valneva SE and Galmed Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Galmed Pharmaceuticals 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 Galmed Pharmaceuticals 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 Galmed Pharmaceuticals, you can compare the effects of market volatilities on Valneva SE and Galmed Pharmaceuticals 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 Galmed Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Galmed Pharmaceuticals.
Diversification Opportunities for Valneva SE and Galmed Pharmaceuticals
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Valneva and Galmed is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Galmed Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galmed Pharmaceuticals 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 Galmed Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galmed Pharmaceuticals has no effect on the direction of Valneva SE i.e., Valneva SE and Galmed Pharmaceuticals go up and down completely randomly.
Pair Corralation between Valneva SE and Galmed Pharmaceuticals
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 1.35 times more return on investment than Galmed Pharmaceuticals. However, Valneva SE is 1.35 times more volatile than Galmed Pharmaceuticals. It trades about 0.19 of its potential returns per unit of risk. Galmed Pharmaceuticals is currently generating about -0.25 per unit of risk. If you would invest 537.00 in Valneva SE ADR on December 3, 2024 and sell it today you would earn a total of 145.00 from holding Valneva SE ADR or generate 27.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Valneva SE ADR vs. Galmed Pharmaceuticals
Performance |
Timeline |
Valneva SE ADR |
Galmed Pharmaceuticals |
Valneva SE and Galmed Pharmaceuticals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Valneva SE and Galmed Pharmaceuticals
The main advantage of trading using opposite Valneva SE and Galmed Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Galmed Pharmaceuticals 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 Galmed Pharmaceuticals will offset losses from the drop in Galmed Pharmaceuticals' 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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