Correlation Between NewAmsterdam Pharma and Valneva SE
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam 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 NewAmsterdam 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 NewAmsterdam Pharma and Valneva SE ADR, you can compare the effects of market volatilities on NewAmsterdam 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 NewAmsterdam Pharma with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and Valneva SE.
Diversification Opportunities for NewAmsterdam Pharma and Valneva SE
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NewAmsterdam and Valneva is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma 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 NewAmsterdam 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 NewAmsterdam 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 ADR has no effect on the direction of NewAmsterdam Pharma i.e., NewAmsterdam Pharma and Valneva SE go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and Valneva SE
Given the investment horizon of 90 days NewAmsterdam Pharma is expected to generate 1.88 times more return on investment than Valneva SE. However, NewAmsterdam Pharma is 1.88 times more volatile than Valneva SE ADR. It trades about 0.1 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.62 per unit of risk. If you would invest 1,913 in NewAmsterdam Pharma on August 29, 2024 and sell it today you would earn a total of 171.00 from holding NewAmsterdam Pharma or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. Valneva SE ADR
Performance |
| Timeline |
| NewAmsterdam Pharma |
| Valneva SE ADR |
NewAmsterdam Pharma and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and Valneva SE
The main advantage of trading using opposite NewAmsterdam Pharma and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam 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.| NewAmsterdam Pharma vs. Bright Minds Biosciences | NewAmsterdam Pharma vs. HP Inc | NewAmsterdam Pharma vs. Intel | NewAmsterdam Pharma vs. Chevron Corp |
| Valneva SE vs. Bright Minds Biosciences | Valneva SE vs. HP Inc | Valneva SE vs. Intel | Valneva SE vs. Chevron Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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