Correlation Between Valneva SE and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics, you can compare the effects of market volatilities on Valneva SE and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Arrow Electronics.
Diversification Opportunities for Valneva SE and Arrow Electronics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valneva and Arrow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Valneva SE i.e., Valneva SE and Arrow Electronics go up and down completely randomly.
Pair Corralation between Valneva SE and Arrow Electronics
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 2.33 times more return on investment than Arrow Electronics. However, Valneva SE is 2.33 times more volatile than Arrow Electronics. It trades about 0.21 of its potential returns per unit of risk. Arrow Electronics is currently generating about 0.09 per unit of risk. If you would invest 399.00 in Valneva SE ADR on October 21, 2024 and sell it today you would earn a total of 38.00 from holding Valneva SE ADR or generate 9.52% 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. Arrow Electronics
Performance |
| Timeline |
| Valneva SE ADR |
| Arrow Electronics |
Valneva SE and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Arrow Electronics
The main advantage of trading using opposite Valneva SE and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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