Correlation Between Valneva SE and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Aegean Airlines 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 Aegean Airlines 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 Aegean Airlines SA, you can compare the effects of market volatilities on Valneva SE and Aegean Airlines 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 Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Aegean Airlines.
Diversification Opportunities for Valneva SE and Aegean Airlines
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valneva and Aegean is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA 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 Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Valneva SE i.e., Valneva SE and Aegean Airlines go up and down completely randomly.
Pair Corralation between Valneva SE and Aegean Airlines
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Aegean Airlines. In addition to that, Valneva SE is 1.68 times more volatile than Aegean Airlines SA. It trades about -0.1 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.01 per unit of volatility. If you would invest 1,072 in Aegean Airlines SA on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Aegean Airlines SA or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Valneva SE ADR vs. Aegean Airlines SA
Performance |
| Timeline |
| Valneva SE ADR |
| Aegean Airlines SA |
Valneva SE and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Aegean Airlines
The main advantage of trading using opposite Valneva SE and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
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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