Correlation Between Valneva SE and Cabaletta Bio
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Cabaletta 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 Cabaletta 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 Cabaletta Bio, you can compare the effects of market volatilities on Valneva SE and Cabaletta 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 Cabaletta Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Cabaletta Bio.
Diversification Opportunities for Valneva SE and Cabaletta Bio
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valneva and Cabaletta is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Cabaletta Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabaletta 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 Cabaletta Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabaletta Bio has no effect on the direction of Valneva SE i.e., Valneva SE and Cabaletta Bio go up and down completely randomly.
Pair Corralation between Valneva SE and Cabaletta Bio
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.31 times more return on investment than Cabaletta Bio. However, Valneva SE ADR is 3.25 times less risky than Cabaletta Bio. It trades about -0.63 of its potential returns per unit of risk. Cabaletta Bio is currently generating about -0.2 per unit of risk. If you would invest 609.00 in Valneva SE ADR on August 29, 2024 and sell it today you would lose (209.00) from holding Valneva SE ADR or give up 34.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Cabaletta Bio
Performance |
| Timeline |
| Valneva SE ADR |
| Cabaletta Bio |
Valneva SE and Cabaletta Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Cabaletta Bio
The main advantage of trading using opposite Valneva SE and Cabaletta Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Cabaletta 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 Cabaletta Bio will offset losses from the drop in Cabaletta Bio's long position.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals | Valneva SE vs. Seres Therapeutics |
| Cabaletta Bio vs. Revolution Medicines | Cabaletta Bio vs. Black Diamond Therapeutics | Cabaletta Bio vs. Passage Bio | Cabaletta Bio vs. 89bio Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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