Correlation Between Valneva SE and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Abbott Laboratories 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 Abbott Laboratories 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 Abbott Laboratories, you can compare the effects of market volatilities on Valneva SE and Abbott Laboratories 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 Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Abbott Laboratories.
Diversification Opportunities for Valneva SE and Abbott Laboratories
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Valneva and Abbott is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories 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 Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of Valneva SE i.e., Valneva SE and Abbott Laboratories go up and down completely randomly.
Pair Corralation between Valneva SE and Abbott Laboratories
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Abbott Laboratories. In addition to that, Valneva SE is 2.16 times more volatile than Abbott Laboratories. It trades about -0.53 of its total potential returns per unit of risk. Abbott Laboratories is currently generating about 0.12 per unit of volatility. If you would invest 11,407 in Abbott Laboratories on August 27, 2024 and sell it today you would earn a total of 369.00 from holding Abbott Laboratories or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Abbott Laboratories
Performance |
| Timeline |
| Valneva SE ADR |
| Abbott Laboratories |
Valneva SE and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Abbott Laboratories
The main advantage of trading using opposite Valneva SE and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals |
| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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