Correlation Between Valneva SE and ALTRIA

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

Diversification Opportunities for Valneva SE and ALTRIA

0.68

Correlation Coefficient

Valneva SE  ALTRIA

Poor diversification

The 3 months correlation between Valneva and ALTRIA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and ALTRIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTRIA GROUP INC 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 ALTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTRIA GROUP INC has no effect on the direction of Valneva SE i.e., Valneva SE and ALTRIA go up and down completely randomly.

Pair Corralation between Valneva SE and ALTRIA

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 6.42 times more return on investment than ALTRIA. However, Valneva SE is 6.42 times more volatile than ALTRIA GROUP INC. It trades about 0.2 of its potential returns per unit of risk. ALTRIA GROUP INC is currently generating about -0.06 per unit of risk. If you would invest  419.00  in Valneva SE ADR on December 24, 2024 and sell it today you would earn a total of  298.00  from holding Valneva SE ADR or generate 71.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Valneva SE ADR  vs.  ALTRIA GROUP INC

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 15 (%) 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.

ALTRIA GROUP INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALTRIA GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ALTRIA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Valneva SE and ALTRIA

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

The idea behind Valneva SE ADR and ALTRIA GROUP INC 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..