Correlation Between Valneva SE and Quantum BioPharma

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

Diversification Opportunities for Valneva SE and Quantum BioPharma

0.67

Correlation Coefficient

Valneva SE  Quantum BioPharma

Poor diversification

The 3 months correlation between Valneva and Quantum is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Quantum BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum 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 Quantum BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum BioPharma has no effect on the direction of Valneva SE i.e., Valneva SE and Quantum BioPharma go up and down completely randomly.

Pair Corralation between Valneva SE and Quantum BioPharma

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.5 times more return on investment than Quantum BioPharma. However, Valneva SE ADR is 2.02 times less risky than Quantum BioPharma. It trades about 0.2 of its potential returns per unit of risk. Quantum BioPharma is currently generating about 0.07 per unit of risk. If you would invest  419.00  in Valneva SE ADR on October 25, 2024 and sell it today you would earn a total of  44.00  from holding Valneva SE ADR or generate 10.5% return on investment over 90 days.

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

Valneva SE ADR  vs.  Quantum 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 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.

Quantum BioPharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantum BioPharma 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 basic 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.

Pair Trading with Valneva SE and Quantum BioPharma

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

The idea behind Valneva SE ADR and Quantum 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.