Correlation Between Valneva SE and Phio Pharmaceuticals

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

Diversification Opportunities for Valneva SE and Phio Pharmaceuticals

0.64

Correlation Coefficient

Valneva SE  Phio Pharmaceuticals

Poor diversification

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

Pair Corralation between Valneva SE and Phio Pharmaceuticals

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.45 times more return on investment than Phio Pharmaceuticals. However, Valneva SE ADR is 2.2 times less risky than Phio Pharmaceuticals. It trades about -0.05 of its potential returns per unit of risk. Phio Pharmaceuticals Corp is currently generating about -0.03 per unit of risk. If you would invest  1,338  in Valneva SE ADR on September 19, 2024 and sell it today you would lose (967.00) from holding Valneva SE ADR or give up 72.27% of portfolio value over 90 days.

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

Valneva SE ADR  vs.  Phio Pharmaceuticals Corp

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

Phio Pharmaceuticals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phio Pharmaceuticals Corp 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 forward 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.

Pair Trading with Valneva SE and Phio Pharmaceuticals

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

The idea behind Valneva SE ADR and Phio Pharmaceuticals 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.