Correlation Between Valneva SE and Barrick Gold

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

Diversification Opportunities for Valneva SE and Barrick Gold

0.9

Correlation Coefficient

Valneva SE  Barrick Gold

Almost no diversification

The 3 months correlation between Valneva and Barrick is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Valneva SE i.e., Valneva SE and Barrick Gold go up and down completely randomly.

Pair Corralation between Valneva SE and Barrick Gold

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 2.91 times more return on investment than Barrick Gold. However, Valneva SE is 2.91 times more volatile than Barrick Gold Corp. It trades about 0.19 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.23 per unit of risk. If you would invest  432.00  in Valneva SE ADR on December 29, 2024 and sell it today you would earn a total of  293.00  from holding Valneva SE ADR or generate 67.82% return on investment over 90 days.

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

Valneva SE ADR  vs.  Barrick Gold Corp

Valneva SE ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE ADR are ranked lower than 14 (%) 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.

Barrick Gold Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barrick Gold Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Barrick Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valneva SE and Barrick Gold

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

The idea behind Valneva SE ADR and Barrick Gold Corp 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 Global Correlations module to find global opportunities by holding instruments from different markets.