Correlation Between Valneva SE and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Valneva SE and AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC ADR, you can compare the effects of market volatilities on Valneva SE and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and AstraZeneca PLC.
Diversification Opportunities for Valneva SE and AstraZeneca PLC
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valneva and AstraZeneca is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and AstraZeneca PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC ADR 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC ADR has no effect on the direction of Valneva SE i.e., Valneva SE and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Valneva SE and AstraZeneca PLC
Given the investment horizon of 90 days Valneva SE is expected to generate 2.49 times less return on investment than AstraZeneca PLC. In addition to that, Valneva SE is 3.28 times more volatile than AstraZeneca PLC ADR. It trades about 0.02 of its total potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about 0.18 per unit of volatility. If you would invest 6,444 in AstraZeneca PLC ADR on October 20, 2024 and sell it today you would earn a total of 216.00 from holding AstraZeneca PLC ADR or generate 3.35% 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. AstraZeneca PLC ADR
Performance |
| Timeline |
| Valneva SE ADR |
| AstraZeneca PLC ADR |
Valneva SE and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and AstraZeneca PLC
The main advantage of trading using opposite Valneva SE and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC'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 |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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