Correlation Between Innate Pharma and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Innate Pharma 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 Innate Pharma and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innate Pharma and Valneva SE, you can compare the effects of market volatilities on Innate Pharma 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 Innate Pharma with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innate Pharma and Valneva SE.
Diversification Opportunities for Innate Pharma and Valneva SE
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innate and Valneva is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Innate Pharma and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE and Innate Pharma 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 Innate Pharma 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 Innate Pharma i.e., Innate Pharma and Valneva SE go up and down completely randomly.
Pair Corralation between Innate Pharma and Valneva SE
Assuming the 90 days trading horizon Innate Pharma is expected to generate 0.76 times more return on investment than Valneva SE. However, Innate Pharma is 1.31 times less risky than Valneva SE. It trades about -0.05 of its potential returns per unit of risk. Valneva SE is currently generating about -0.1 per unit of risk. If you would invest 228.00 in Innate Pharma on August 24, 2024 and sell it today you would lose (75.00) from holding Innate Pharma or give up 32.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innate Pharma vs. Valneva SE
Performance |
| Timeline |
| Innate Pharma |
| Valneva SE |
Innate Pharma and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innate Pharma and Valneva SE
The main advantage of trading using opposite Innate Pharma and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innate Pharma 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.| Innate Pharma vs. Genfit | Innate Pharma vs. Nanobiotix SA | Innate Pharma vs. Cellectis | Innate Pharma vs. AB Science SA |
| Valneva SE vs. Innate Pharma | Valneva SE vs. DBV Technologies SA | Valneva SE vs. Genfit | Valneva SE vs. Valneva SE ADR |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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