Correlation Between Life Time and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Life Time 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 Life Time and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Time Group and Valneva SE ADR, you can compare the effects of market volatilities on Life Time 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 Life Time with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Valneva SE.
Diversification Opportunities for Life Time and Valneva SE
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Life and Valneva is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group 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 Life Time 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 Life Time Group 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 Life Time i.e., Life Time and Valneva SE go up and down completely randomly.
Pair Corralation between Life Time and Valneva SE
Considering the 90-day investment horizon Life Time is expected to generate 5.12 times less return on investment than Valneva SE. But when comparing it to its historical volatility, Life Time Group is 4.34 times less risky than Valneva SE. It trades about 0.24 of its potential returns per unit of risk. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Time Group vs. Valneva SE ADR
Performance |
| Timeline |
| Life Time Group |
| Valneva SE ADR |
Life Time and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Valneva SE
The main advantage of trading using opposite Life Time and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time 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.| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness | Life Time vs. Mattel Inc |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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