Correlation Between Valneva SE and Raiffeisen Bank

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

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

Diversification Opportunities for Valneva SE and Raiffeisen Bank

-0.37

Correlation Coefficient

Valneva SE  Raiffeisen Bank

Very good diversification

The 3 months correlation between Valneva and Raiffeisen is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE and Raiffeisen Bank International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiffeisen Bank Inte 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 Raiffeisen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiffeisen Bank Inte has no effect on the direction of Valneva SE i.e., Valneva SE and Raiffeisen Bank go up and down completely randomly.

Pair Corralation between Valneva SE and Raiffeisen Bank

Assuming the 90 days trading horizon Valneva SE is expected to under-perform the Raiffeisen Bank. In addition to that, Valneva SE is 1.41 times more volatile than Raiffeisen Bank International. It trades about -0.27 of its total potential returns per unit of risk. Raiffeisen Bank International is currently generating about 0.02 per unit of volatility. If you would invest  1,812  in Raiffeisen Bank International on September 2, 2024 and sell it today you would earn a total of  34.00  from holding Raiffeisen Bank International or generate 1.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Valneva SE  vs.  Raiffeisen Bank International

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 inconsistent 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.

Raiffeisen Bank Inte

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Raiffeisen Bank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Valneva SE and Raiffeisen Bank

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

The idea behind Valneva SE and Raiffeisen Bank International 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.