Correlation Between Valneva SE and Abacus Life
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Abacus Life 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 Valneva SE and Abacus Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valneva SE ADR and Abacus Life, you can compare the effects of market volatilities on Valneva SE and Abacus Life 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 Valneva SE with a short position of Abacus Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Abacus Life.
Diversification Opportunities for Valneva SE and Abacus Life
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Valneva and Abacus is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Abacus Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abacus Life and Valneva SE 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 Valneva SE ADR are associated (or correlated) with Abacus Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abacus Life has no effect on the direction of Valneva SE i.e., Valneva SE and Abacus Life go up and down completely randomly.
Pair Corralation between Valneva SE and Abacus Life
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 2.12 times more return on investment than Abacus Life. However, Valneva SE is 2.12 times more volatile than Abacus Life. It trades about 0.38 of its potential returns per unit of risk. Abacus Life is currently generating about 0.1 per unit of risk. If you would invest 466.00 in Valneva SE ADR on November 8, 2024 and sell it today you would earn a total of 227.00 from holding Valneva SE ADR or generate 48.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Abacus Life
Performance |
| Timeline |
| Valneva SE ADR |
| Abacus Life |
Valneva SE and Abacus Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Abacus Life
The main advantage of trading using opposite Valneva SE and Abacus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Abacus Life 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 Abacus Life will offset losses from the drop in Abacus Life's long position.| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
| Abacus Life vs. Elite Education Group | Abacus Life vs. Simon Property Group | Abacus Life vs. EastGroup Properties | Abacus Life vs. PennantPark Floating Rate |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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