Correlation Between SGS SA and Valneva SE
Can any of the company-specific risk be diversified away by investing in both SGS SA 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 SGS SA and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGS SA and Valneva SE ADR, you can compare the effects of market volatilities on SGS SA 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 SGS SA with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGS SA and Valneva SE.
Diversification Opportunities for SGS SA and Valneva SE
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SGS and Valneva is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SGS SA 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 SGS SA 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 SGS SA 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 SGS SA i.e., SGS SA and Valneva SE go up and down completely randomly.
Pair Corralation between SGS SA and Valneva SE
Assuming the 90 days horizon SGS SA is expected to generate 0.46 times more return on investment than Valneva SE. However, SGS SA is 2.16 times less risky than Valneva SE. It trades about -0.06 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.08 per unit of risk. If you would invest 1,099 in SGS SA on November 2, 2024 and sell it today you would lose (122.00) from holding SGS SA or give up 11.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
SGS SA vs. Valneva SE ADR
Performance |
| Timeline |
| SGS SA |
| Valneva SE ADR |
SGS SA and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGS SA and Valneva SE
The main advantage of trading using opposite SGS SA and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGS SA 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.| SGS SA vs. Blue Diamond Ventures | SGS SA vs. American Diversified Holdings | SGS SA vs. Daniels Corporate Advisory | SGS SA vs. AimRite Holdings Corp |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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