Correlation Between Valneva SE and Beauty Health

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Beauty Health 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 Beauty Health 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 Beauty Health Co, you can compare the effects of market volatilities on Valneva SE and Beauty Health 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 Beauty Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Beauty Health.

Diversification Opportunities for Valneva SE and Beauty Health

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Valneva and Beauty is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Beauty Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beauty Health 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 Beauty Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beauty Health has no effect on the direction of Valneva SE i.e., Valneva SE and Beauty Health go up and down completely randomly.

Pair Corralation between Valneva SE and Beauty Health

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Beauty Health. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.26 times less risky than Beauty Health. The stock trades about -0.09 of its potential returns per unit of risk. The Beauty Health Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  165.00  in Beauty Health Co on October 25, 2024 and sell it today you would earn a total of  2.00  from holding Beauty Health Co or generate 1.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Valneva SE ADR  vs.  Beauty Health Co

 Performance 
       Timeline  
Valneva SE ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Beauty Health 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Beauty Health Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward indicators, Beauty Health may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Valneva SE and Beauty Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Valneva SE and Beauty Health

The main advantage of trading using opposite Valneva SE and Beauty Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Beauty Health 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 Beauty Health will offset losses from the drop in Beauty Health's long position.
The idea behind Valneva SE ADR and Beauty Health Co 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon