Correlation Between Valneva SE and BioLineRx
Can any of the company-specific risk be diversified away by investing in both Valneva SE and BioLineRx 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 BioLineRx 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 BioLineRx, you can compare the effects of market volatilities on Valneva SE and BioLineRx 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 BioLineRx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and BioLineRx.
Diversification Opportunities for Valneva SE and BioLineRx
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valneva and BioLineRx is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and BioLineRx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLineRx 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 BioLineRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLineRx has no effect on the direction of Valneva SE i.e., Valneva SE and BioLineRx go up and down completely randomly.
Pair Corralation between Valneva SE and BioLineRx
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.6 times more return on investment than BioLineRx. However, Valneva SE ADR is 1.65 times less risky than BioLineRx. It trades about -0.03 of its potential returns per unit of risk. BioLineRx is currently generating about -0.03 per unit of risk. If you would invest 1,288 in Valneva SE ADR on November 2, 2024 and sell it today you would lose (713.00) from holding Valneva SE ADR or give up 55.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. BioLineRx
Performance |
| Timeline |
| Valneva SE ADR |
| BioLineRx |
Valneva SE and BioLineRx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and BioLineRx
The main advantage of trading using opposite Valneva SE and BioLineRx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, BioLineRx 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 BioLineRx will offset losses from the drop in BioLineRx'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 |
| BioLineRx vs. Ardelyx | BioLineRx vs. Lexicon Pharmaceuticals | BioLineRx vs. Seres Therapeutics | BioLineRx vs. Immunitybio |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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