Correlation Between Naked Wines and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Naked Wines 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 Naked Wines and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naked Wines plc and Valneva SE ADR, you can compare the effects of market volatilities on Naked Wines 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 Naked Wines with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naked Wines and Valneva SE.
Diversification Opportunities for Naked Wines and Valneva SE
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naked and Valneva is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Naked Wines plc 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 Naked Wines 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 Naked Wines plc 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 Naked Wines i.e., Naked Wines and Valneva SE go up and down completely randomly.
Pair Corralation between Naked Wines and Valneva SE
Assuming the 90 days horizon Naked Wines plc is expected to generate 0.36 times more return on investment than Valneva SE. However, Naked Wines plc is 2.79 times less risky than Valneva SE. It trades about -0.23 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.28 per unit of risk. If you would invest 271.00 in Naked Wines plc on September 19, 2024 and sell it today you would lose (16.00) from holding Naked Wines plc or give up 5.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Naked Wines plc vs. Valneva SE ADR
Performance |
| Timeline |
| Naked Wines plc |
| Valneva SE ADR |
Naked Wines and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naked Wines and Valneva SE
The main advantage of trading using opposite Naked Wines and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naked Wines 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.| Naked Wines vs. Pernod Ricard SA | Naked Wines vs. Naked Wines plc | Naked Wines vs. Crimson Wine | Naked Wines vs. Brown Forman |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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