Correlation Between Valneva SE and CureVac NV
Can any of the company-specific risk be diversified away by investing in both Valneva SE and CureVac NV 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 CureVac NV 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 CureVac NV, you can compare the effects of market volatilities on Valneva SE and CureVac NV 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 CureVac NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and CureVac NV.
Diversification Opportunities for Valneva SE and CureVac NV
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valneva and CureVac is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV 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 CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Valneva SE i.e., Valneva SE and CureVac NV go up and down completely randomly.
Pair Corralation between Valneva SE and CureVac NV
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the CureVac NV. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.19 times less risky than CureVac NV. The stock trades about -0.58 of its potential returns per unit of risk. The CureVac NV is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 283.00 in CureVac NV on August 28, 2024 and sell it today you would lose (6.00) from holding CureVac NV or give up 2.12% 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. CureVac NV
Performance |
| Timeline |
| Valneva SE ADR |
| CureVac NV |
Valneva SE and CureVac NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and CureVac NV
The main advantage of trading using opposite Valneva SE and CureVac NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, CureVac NV 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 CureVac NV will offset losses from the drop in CureVac NV's long position.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals |
| CureVac NV vs. Merit Medical Systems | CureVac NV vs. SmartStop Self Storage | CureVac NV vs. Cadence Design Systems | CureVac NV vs. Microbot Medical |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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