Correlation Between Valneva SE and Surrozen Warrant

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

Diversification Opportunities for Valneva SE and Surrozen Warrant

0.44

Correlation Coefficient

Valneva SE  Surrozen Warrant

Very weak diversification

The 3 months correlation between Valneva and Surrozen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Surrozen Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surrozen Warrant 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 Surrozen Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surrozen Warrant has no effect on the direction of Valneva SE i.e., Valneva SE and Surrozen Warrant go up and down completely randomly.

Pair Corralation between Valneva SE and Surrozen Warrant

Given the investment horizon of 90 days Valneva SE is expected to generate 6.27 times less return on investment than Surrozen Warrant. But when comparing it to its historical volatility, Valneva SE ADR is 7.83 times less risky than Surrozen Warrant. It trades about 0.21 of its potential returns per unit of risk. Surrozen Warrant is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2.99  in Surrozen Warrant on December 23, 2024 and sell it today you would lose (0.05) from holding Surrozen Warrant or give up 1.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	72.13%
Values	Daily Returns

Valneva SE ADR  vs.  Surrozen Warrant

Valneva SE ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE ADR are ranked lower than 16 (%) 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.

Surrozen Warrant

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Surrozen Warrant are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Surrozen Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valneva SE and Surrozen Warrant

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

The idea behind Valneva SE ADR and Surrozen Warrant 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.