Correlation Between Valneva SE and Kiromic Biopharma

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

Diversification Opportunities for Valneva SE and Kiromic Biopharma

0.64

Correlation Coefficient

Valneva SE  Kiromic Biopharma

Poor diversification

The 3 months correlation between Valneva and Kiromic is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Kiromic Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiromic Biopharma 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 Kiromic Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiromic Biopharma has no effect on the direction of Valneva SE i.e., Valneva SE and Kiromic Biopharma go up and down completely randomly.

Pair Corralation between Valneva SE and Kiromic Biopharma

If you would invest  268.00  in Kiromic Biopharma on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Kiromic Biopharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Valneva SE ADR  vs.  Kiromic Biopharma

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Kiromic Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kiromic Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Kiromic Biopharma is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Valneva SE and Kiromic Biopharma

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

The idea behind Valneva SE ADR and Kiromic Biopharma 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.