Correlation Between Erste Group and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Erste Group 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 Erste Group and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erste Group Bank and Valneva SE, you can compare the effects of market volatilities on Erste Group 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 Erste Group with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and Valneva SE.
Diversification Opportunities for Erste Group and Valneva SE
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erste and Valneva is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE and Erste Group 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 Erste Group Bank 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 has no effect on the direction of Erste Group i.e., Erste Group and Valneva SE go up and down completely randomly.
Pair Corralation between Erste Group and Valneva SE
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.33 times more return on investment than Valneva SE. However, Erste Group Bank is 3.02 times less risky than Valneva SE. It trades about 0.15 of its potential returns per unit of risk. Valneva SE is currently generating about -0.07 per unit of risk. If you would invest 3,624 in Erste Group Bank on September 14, 2024 and sell it today you would earn a total of 2,130 from holding Erste Group Bank or generate 58.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Erste Group Bank vs. Valneva SE
Performance |
| Timeline |
| Erste Group Bank |
| Valneva SE |
Erste Group and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and Valneva SE
The main advantage of trading using opposite Erste Group and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group 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.| Erste Group vs. Raiffeisen Bank International | Erste Group vs. OMV Aktiengesellschaft | Erste Group vs. Voestalpine AG | Erste Group vs. Vienna Insurance Group |
| Valneva SE vs. SBM Offshore NV | Valneva SE vs. Erste Group Bank | Valneva SE vs. Vienna Insurance Group | Valneva SE vs. Addiko Bank AG |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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