Correlation Between Valneva SE and Hydrogen Refueling

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

By analyzing existing cross correlation between Valneva SE and Hydrogen Refueling Solutions, you can compare the effects of market volatilities on Valneva SE and Hydrogen Refueling 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 Hydrogen Refueling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Hydrogen Refueling.

Diversification Opportunities for Valneva SE and Hydrogen Refueling

0.82

Correlation Coefficient

Valneva SE  Hydrogen Refueling

Very poor diversification

The 3 months correlation between Valneva and Hydrogen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE and Hydrogen Refueling Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrogen Refueling 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 are associated (or correlated) with Hydrogen Refueling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrogen Refueling has no effect on the direction of Valneva SE i.e., Valneva SE and Hydrogen Refueling go up and down completely randomly.

Pair Corralation between Valneva SE and Hydrogen Refueling

Assuming the 90 days trading horizon Valneva SE is expected to generate 1.05 times more return on investment than Hydrogen Refueling. However, Valneva SE is 1.05 times more volatile than Hydrogen Refueling Solutions. It trades about -0.2 of its potential returns per unit of risk. Hydrogen Refueling Solutions is currently generating about -0.29 per unit of risk. If you would invest  277.00  in Valneva SE on September 15, 2024 and sell it today you would lose (94.00) from holding Valneva SE or give up 33.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.48%
Values	Daily Returns

Valneva SE  vs.  Hydrogen Refueling Solutions

Valneva SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valneva SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hydrogen Refueling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hydrogen Refueling Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Valneva SE and Hydrogen Refueling

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

The idea behind Valneva SE and Hydrogen Refueling Solutions 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 Transaction History module to view history of all your transactions and understand their impact on performance.