Correlation Between VHAI and Valneva SE

Can any of the company-specific risk be diversified away by investing in both VHAI and Valneva SE 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 VHAI and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VHAI and Valneva SE ADR, you can compare the effects of market volatilities on VHAI and Valneva SE 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 VHAI with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VHAI and Valneva SE.

Diversification Opportunities for VHAI and Valneva SE

0.71

Correlation Coefficient

VHAI  Valneva SE

Poor diversification

The 3 months correlation between VHAI and Valneva is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VHAI and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR and VHAI 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 VHAI are associated (or correlated) with Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of VHAI i.e., VHAI and Valneva SE go up and down completely randomly.

Pair Corralation between VHAI and Valneva SE

Given the investment horizon of 90 days VHAI is expected to under-perform the Valneva SE. In addition to that, VHAI is 5.3 times more volatile than Valneva SE ADR. It trades about -0.16 of its total potential returns per unit of risk. Valneva SE ADR is currently generating about -0.34 per unit of volatility. If you would invest  707.00  in Valneva SE ADR on September 5, 2024 and sell it today you would lose (318.00) from holding Valneva SE ADR or give up 44.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.31%
Values	Daily Returns

VHAI  vs.  Valneva SE ADR

VHAI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VHAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Valneva SE ADR

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with VHAI and Valneva SE

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

The idea behind VHAI and Valneva SE ADR 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.