Correlation Between Park Electrochemical and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Park Electrochemical 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 Park Electrochemical and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Electrochemical and Valneva SE ADR, you can compare the effects of market volatilities on Park Electrochemical 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 Park Electrochemical with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Electrochemical and Valneva SE.
Diversification Opportunities for Park Electrochemical and Valneva SE
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Park and Valneva is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Park Electrochemical 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 Park Electrochemical 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 Park Electrochemical 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 Park Electrochemical i.e., Park Electrochemical and Valneva SE go up and down completely randomly.
Pair Corralation between Park Electrochemical and Valneva SE
Considering the 90-day investment horizon Park Electrochemical is expected to generate 0.56 times more return on investment than Valneva SE. However, Park Electrochemical is 1.78 times less risky than Valneva SE. It trades about 0.07 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.07 per unit of risk. If you would invest 1,276 in Park Electrochemical on October 26, 2024 and sell it today you would earn a total of 211.00 from holding Park Electrochemical or generate 16.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Park Electrochemical vs. Valneva SE ADR
Performance |
| Timeline |
| Park Electrochemical |
| Valneva SE ADR |
Park Electrochemical and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Electrochemical and Valneva SE
The main advantage of trading using opposite Park Electrochemical and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Electrochemical 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.| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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