Correlation Between Valneva SE and Red Branch

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

Diversification Opportunities for Valneva SE and Red Branch

0.0

Correlation Coefficient

Valneva SE  Red Branch

Pay attention - limited upside

The 3 months correlation between Valneva and Red is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Red Branch Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Branch Technologies 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 Red Branch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Branch Technologies has no effect on the direction of Valneva SE i.e., Valneva SE and Red Branch go up and down completely randomly.

Pair Corralation between Valneva SE and Red Branch

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Red Branch. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 12.52 times less risky than Red Branch. The stock trades about -0.05 of its potential returns per unit of risk. The Red Branch Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Red Branch Technologies on September 14, 2024 and sell it today you would earn a total of  0.01  from holding Red Branch Technologies or generate 9.223372036854776E16% return on investment over 90 days.

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

Valneva SE ADR  vs.  Red Branch Technologies

Valneva SE ADR

Risk-Adjusted Performance

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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.

Red Branch Technologies

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Red Branch Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Red Branch is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Valneva SE and Red Branch

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

The idea behind Valneva SE ADR and Red Branch Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.