Correlation Between Valneva SE and Eastern
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Valneva SE and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Eastern.
Diversification Opportunities for Valneva SE and Eastern
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Valneva and Eastern is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Valneva SE i.e., Valneva SE and Eastern go up and down completely randomly.
Pair Corralation between Valneva SE and Eastern
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Eastern. In addition to that, Valneva SE is 1.05 times more volatile than Eastern Co. It trades about -0.11 of its total potential returns per unit of risk. Eastern Co is currently generating about 0.06 per unit of volatility. If you would invest 1,780 in Eastern Co on August 29, 2024 and sell it today you would earn a total of 1,071 from holding Eastern Co or generate 60.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Eastern Co
Performance |
| Timeline |
| Valneva SE ADR |
| Eastern |
Valneva SE and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Eastern
The main advantage of trading using opposite Valneva SE and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Valneva SE vs. Bright Minds Biosciences | Valneva SE vs. HP Inc | Valneva SE vs. Intel | Valneva SE vs. Chevron Corp |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. AB SKF | Eastern vs. Kennametal |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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