Correlation Between Valneva SE and Aquestive Therapeutics
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Aquestive Therapeutics 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 Aquestive Therapeutics 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 Aquestive Therapeutics, you can compare the effects of market volatilities on Valneva SE and Aquestive Therapeutics 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 Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Aquestive Therapeutics.
Diversification Opportunities for Valneva SE and Aquestive Therapeutics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valneva and Aquestive is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics 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 Aquestive Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquestive Therapeutics has no effect on the direction of Valneva SE i.e., Valneva SE and Aquestive Therapeutics go up and down completely randomly.
Pair Corralation between Valneva SE and Aquestive Therapeutics
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.99 times more return on investment than Aquestive Therapeutics. However, Valneva SE ADR is 1.01 times less risky than Aquestive Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about -0.24 per unit of risk. If you would invest 435.00 in Valneva SE ADR on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Valneva SE ADR or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Aquestive Therapeutics
Performance |
| Timeline |
| Valneva SE ADR |
| Aquestive Therapeutics |
Valneva SE and Aquestive Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Aquestive Therapeutics
The main advantage of trading using opposite Valneva SE and Aquestive Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Aquestive Therapeutics 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 Aquestive Therapeutics will offset losses from the drop in Aquestive Therapeutics' long position.| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
| Aquestive Therapeutics vs. Evoke Pharma | Aquestive Therapeutics vs. Dynavax Technologies | Aquestive Therapeutics vs. Amphastar P | Aquestive Therapeutics vs. Lantheus Holdings |
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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