Correlation Between Employers Holdings and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Employers Holdings 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 Employers Holdings and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Valneva SE ADR, you can compare the effects of market volatilities on Employers Holdings 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 Employers Holdings with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Valneva SE.
Diversification Opportunities for Employers Holdings and Valneva SE
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Employers and Valneva is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings 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 Employers Holdings 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 Employers Holdings 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 Employers Holdings i.e., Employers Holdings and Valneva SE go up and down completely randomly.
Pair Corralation between Employers Holdings and Valneva SE
Considering the 90-day investment horizon Employers Holdings is expected to generate 0.2 times more return on investment than Valneva SE. However, Employers Holdings is 5.03 times less risky than Valneva SE. It trades about -0.13 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.3 per unit of risk. If you would invest 5,359 in Employers Holdings on September 12, 2024 and sell it today you would lose (111.00) from holding Employers Holdings or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Employers Holdings vs. Valneva SE ADR
Performance |
| Timeline |
| Employers Holdings |
| Valneva SE ADR |
Employers Holdings and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Valneva SE
The main advantage of trading using opposite Employers Holdings and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings 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.| Employers Holdings vs. First American | Employers Holdings vs. Assurant | Employers Holdings vs. NMI Holdings | Employers Holdings vs. MGIC Investment Corp |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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