Correlation Between Valneva SE and IShares MSCI

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

Diversification Opportunities for Valneva SE and IShares MSCI

-0.3

Correlation Coefficient

Valneva SE  IShares MSCI

Very good diversification

The 3 months correlation between Valneva and IShares is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and iShares MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI has no effect on the direction of Valneva SE i.e., Valneva SE and IShares MSCI go up and down completely randomly.

Pair Corralation between Valneva SE and IShares MSCI

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the IShares MSCI. In addition to that, Valneva SE is 5.6 times more volatile than iShares MSCI. It trades about -0.07 of its total potential returns per unit of risk. iShares MSCI is currently generating about 0.13 per unit of volatility. If you would invest  37.00  in iShares MSCI on October 10, 2024 and sell it today you would earn a total of  2.00  from holding iShares MSCI or generate 5.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Valneva SE ADR  vs.  iShares MSCI

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 uncertain 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.

iShares MSCI

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Valneva SE and IShares MSCI

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

The idea behind Valneva SE ADR and iShares MSCI 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.