Correlation Between Valneva SE and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Cebu Air 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 Cebu Air 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 Cebu Air ADR, you can compare the effects of market volatilities on Valneva SE and Cebu Air 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 Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Cebu Air.
Diversification Opportunities for Valneva SE and Cebu Air
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valneva and Cebu is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Cebu Air ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air 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 Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air ADR has no effect on the direction of Valneva SE i.e., Valneva SE and Cebu Air go up and down completely randomly.
Pair Corralation between Valneva SE and Cebu Air
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Cebu Air. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.11 times less risky than Cebu Air. The stock trades about -0.58 of its potential returns per unit of risk. The Cebu Air ADR is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 215.00 in Cebu Air ADR on August 28, 2024 and sell it today you would lose (30.00) from holding Cebu Air ADR or give up 13.95% 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. Cebu Air ADR
Performance |
| Timeline |
| Valneva SE ADR |
| Cebu Air ADR |
Valneva SE and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Cebu Air
The main advantage of trading using opposite Valneva SE and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals |
| Cebu Air vs. Sabra Healthcare REIT | Cebu Air vs. SEI Investments | Cebu Air vs. CVW CleanTech | Cebu Air vs. Xponential Fitness |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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