Correlation Between Fate Therapeutics and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics 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 Fate Therapeutics and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fate Therapeutics and Valneva SE ADR, you can compare the effects of market volatilities on Fate Therapeutics 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 Fate Therapeutics with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Valneva SE.
Diversification Opportunities for Fate Therapeutics and Valneva SE
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fate and Valneva is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics 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 Fate Therapeutics 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 Fate Therapeutics 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 Fate Therapeutics i.e., Fate Therapeutics and Valneva SE go up and down completely randomly.
Pair Corralation between Fate Therapeutics and Valneva SE
Given the investment horizon of 90 days Fate Therapeutics is expected to under-perform the Valneva SE. In addition to that, Fate Therapeutics is 1.57 times more volatile than Valneva SE ADR. It trades about -0.17 of its total potential returns per unit of risk. Valneva SE ADR is currently generating about 0.0 per unit of volatility. If you would invest 430.00 in Valneva SE ADR on September 25, 2024 and sell it today you would lose (11.00) from holding Valneva SE ADR or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fate Therapeutics vs. Valneva SE ADR
Performance |
| Timeline |
| Fate Therapeutics |
| Valneva SE ADR |
Fate Therapeutics and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fate Therapeutics and Valneva SE
The main advantage of trading using opposite Fate Therapeutics and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics 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.| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
| Valneva SE vs. Fate Therapeutics | Valneva SE vs. Caribou Biosciences | Valneva SE vs. Karyopharm Therapeutics | Valneva SE vs. X4 Pharmaceuticals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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