Correlation Between Valneva SE and Bluebird Bio
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Bluebird Bio 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 Bluebird Bio 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 Bluebird bio, you can compare the effects of market volatilities on Valneva SE and Bluebird Bio 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 Bluebird Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Bluebird Bio.
Diversification Opportunities for Valneva SE and Bluebird Bio
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valneva and Bluebird is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Bluebird bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluebird bio 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 Bluebird Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluebird bio has no effect on the direction of Valneva SE i.e., Valneva SE and Bluebird Bio go up and down completely randomly.
Pair Corralation between Valneva SE and Bluebird Bio
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Bluebird Bio. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 2.29 times less risky than Bluebird Bio. The stock trades about -0.58 of its potential returns per unit of risk. The Bluebird bio is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Bluebird bio on August 27, 2024 and sell it today you would lose (13.00) from holding Bluebird bio or give up 26.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Bluebird bio
Performance |
| Timeline |
| Valneva SE ADR |
| Bluebird bio |
Valneva SE and Bluebird Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Bluebird Bio
The main advantage of trading using opposite Valneva SE and Bluebird Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Bluebird Bio 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 Bluebird Bio will offset losses from the drop in Bluebird Bio's long position.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals |
| Bluebird Bio vs. Eliem Therapeutics | Bluebird Bio vs. HCW Biologics | Bluebird Bio vs. Scpharmaceuticals | Bluebird Bio vs. Milestone Pharmaceuticals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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