Correlation Between Valneva SE and Lion One

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

Diversification Opportunities for Valneva SE and Lion One

0.18

Correlation Coefficient

Valneva SE  Lion One

Average diversification

The 3 months correlation between Valneva and Lion is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Valneva SE i.e., Valneva SE and Lion One go up and down completely randomly.

Pair Corralation between Valneva SE and Lion One

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.83 times more return on investment than Lion One. However, Valneva SE ADR is 1.2 times less risky than Lion One. It trades about 0.19 of its potential returns per unit of risk. Lion One Metals is currently generating about 0.1 per unit of risk. If you would invest  432.00  in Valneva SE ADR on December 28, 2024 and sell it today you would earn a total of  294.00  from holding Valneva SE ADR or generate 68.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Valneva SE ADR  vs.  Lion One Metals

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.

Lion One Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lion One Metals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Lion One reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valneva SE and Lion One

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

The idea behind Valneva SE ADR and Lion One Metals 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.