Correlation Between Funko and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Funko 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 Funko and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Funko Inc and Valneva SE ADR, you can compare the effects of market volatilities on Funko 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 Funko with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Funko and Valneva SE.
Diversification Opportunities for Funko and Valneva SE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Funko and Valneva is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Funko Inc 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 Funko 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 Funko Inc 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 Funko i.e., Funko and Valneva SE go up and down completely randomly.
Pair Corralation between Funko and Valneva SE
Given the investment horizon of 90 days Funko Inc is expected to under-perform the Valneva SE. But the stock apears to be less risky and, when comparing its historical volatility, Funko Inc is 3.83 times less risky than Valneva SE. The stock trades about -0.12 of its potential returns per unit of risk. The Valneva SE ADR is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 485.00 in Valneva SE ADR on November 28, 2024 and sell it today you would earn a total of 251.00 from holding Valneva SE ADR or generate 51.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Funko Inc vs. Valneva SE ADR
Performance |
| Timeline |
| Funko Inc |
| Valneva SE ADR |
Funko and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Funko and Valneva SE
The main advantage of trading using opposite Funko and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Funko 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.The idea behind Funko Inc and Valneva SE ADR 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.| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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