Correlation Between Valneva SE and 89bio
Can any of the company-specific risk be diversified away by investing in both Valneva SE and 89bio 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 89bio 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 89bio Inc, you can compare the effects of market volatilities on Valneva SE and 89bio 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 89bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and 89bio.
Diversification Opportunities for Valneva SE and 89bio
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valneva and 89bio is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and 89bio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 89bio Inc 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 89bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 89bio Inc has no effect on the direction of Valneva SE i.e., Valneva SE and 89bio go up and down completely randomly.
Pair Corralation between Valneva SE and 89bio
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the 89bio. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.42 times less risky than 89bio. The stock trades about -0.09 of its potential returns per unit of risk. The 89bio Inc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,658 in 89bio Inc on September 12, 2024 and sell it today you would lose (851.00) from holding 89bio Inc or give up 51.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. 89bio Inc
Performance |
| Timeline |
| Valneva SE ADR |
| 89bio Inc |
Valneva SE and 89bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and 89bio
The main advantage of trading using opposite Valneva SE and 89bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, 89bio 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 89bio will offset losses from the drop in 89bio's long position.| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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