Correlation Between LAir Liquide and Valneva SE
Can any of the company-specific risk be diversified away by investing in both LAir Liquide 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 LAir Liquide and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAir Liquide SA and Valneva SE ADR, you can compare the effects of market volatilities on LAir Liquide 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 LAir Liquide with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and Valneva SE.
Diversification Opportunities for LAir Liquide and Valneva SE
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LAir and Valneva is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA 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 LAir Liquide 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 LAir Liquide SA 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 LAir Liquide i.e., LAir Liquide and Valneva SE go up and down completely randomly.
Pair Corralation between LAir Liquide and Valneva SE
Assuming the 90 days horizon LAir Liquide SA is expected to generate 0.42 times more return on investment than Valneva SE. However, LAir Liquide SA is 2.4 times less risky than Valneva SE. It trades about 0.01 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.01 per unit of risk. If you would invest 16,970 in LAir Liquide SA on November 9, 2024 and sell it today you would earn a total of 433.00 from holding LAir Liquide SA or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LAir Liquide SA vs. Valneva SE ADR
Performance |
| Timeline |
| LAir Liquide SA |
| Valneva SE ADR |
LAir Liquide and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and Valneva SE
The main advantage of trading using opposite LAir Liquide and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide 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.| LAir Liquide vs. Asia Carbon Industries | LAir Liquide vs. Akzo Nobel NV | LAir Liquide vs. Avoca LLC | LAir Liquide vs. AGC Inc ADR |
| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
Check out your portfolio center.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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