Correlation Between Valneva SE and Compass Therapeutics
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Compass Therapeutics 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 Compass Therapeutics 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 Compass Therapeutics, you can compare the effects of market volatilities on Valneva SE and Compass Therapeutics 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 Compass Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Compass Therapeutics.
Diversification Opportunities for Valneva SE and Compass Therapeutics
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valneva and Compass is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Compass Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Therapeutics 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 Compass Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Therapeutics has no effect on the direction of Valneva SE i.e., Valneva SE and Compass Therapeutics go up and down completely randomly.
Pair Corralation between Valneva SE and Compass Therapeutics
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Compass Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.29 times less risky than Compass Therapeutics. The stock trades about -0.05 of its potential returns per unit of risk. The Compass Therapeutics is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Compass Therapeutics on August 24, 2024 and sell it today you would lose (304.00) from holding Compass Therapeutics or give up 67.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Compass Therapeutics
Performance |
| Timeline |
| Valneva SE ADR |
| Compass Therapeutics |
Valneva SE and Compass Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Compass Therapeutics
The main advantage of trading using opposite Valneva SE and Compass Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Compass Therapeutics 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 Compass Therapeutics will offset losses from the drop in Compass Therapeutics' long position.| Valneva SE vs. Lyra Therapeutics | Valneva SE vs. Hookipa Pharma | Valneva SE vs. Cingulate Warrants | Valneva SE vs. SAB Biotherapeutics |
| Compass Therapeutics vs. Lyra Therapeutics | Compass Therapeutics vs. Hookipa Pharma | Compass Therapeutics vs. Cingulate Warrants | Compass Therapeutics vs. SAB Biotherapeutics |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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