Correlation Between Valneva SE and 909319AA3

Can any of the company-specific risk be diversified away by investing in both Valneva SE and 909319AA3 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 909319AA3 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 US909319AA30, you can compare the effects of market volatilities on Valneva SE and 909319AA3 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 909319AA3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and 909319AA3.

Diversification Opportunities for Valneva SE and 909319AA3

0.75

Correlation Coefficient

Valneva SE  909319AA3

Poor diversification

The 3 months correlation between Valneva and 909319AA3 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and US909319AA30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US909319AA30 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 909319AA3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US909319AA30 has no effect on the direction of Valneva SE i.e., Valneva SE and 909319AA3 go up and down completely randomly.

Pair Corralation between Valneva SE and 909319AA3

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 5.13 times more return on investment than 909319AA3. However, Valneva SE is 5.13 times more volatile than US909319AA30. It trades about 0.21 of its potential returns per unit of risk. US909319AA30 is currently generating about -0.05 per unit of risk. If you would invest  420.00  in Valneva SE ADR on December 25, 2024 and sell it today you would earn a total of  323.00  from holding Valneva SE ADR or generate 76.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	55.93%
Values	Daily Returns

Valneva SE ADR  vs.  US909319AA30

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.

US909319AA30

Risk-Adjusted Performance

Very Weak

Over the last 90 days US909319AA30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 909319AA3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Valneva SE and 909319AA3

The main advantage of trading using opposite Valneva SE and 909319AA3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, 909319AA3 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 909319AA3 will offset losses from the drop in 909319AA3's long position.

The idea behind Valneva SE ADR and US909319AA30 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.