Correlation Between Valneva SE and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Finnair Oyj 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 Finnair Oyj 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 Finnair Oyj, you can compare the effects of market volatilities on Valneva SE and Finnair Oyj 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 Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Finnair Oyj.
Diversification Opportunities for Valneva SE and Finnair Oyj
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valneva and Finnair is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj 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 Finnair Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnair Oyj has no effect on the direction of Valneva SE i.e., Valneva SE and Finnair Oyj go up and down completely randomly.
Pair Corralation between Valneva SE and Finnair Oyj
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Finnair Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.22 times less risky than Finnair Oyj. The stock trades about -0.58 of its potential returns per unit of risk. The Finnair Oyj is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 250.00 in Finnair Oyj on August 28, 2024 and sell it today you would lose (15.00) from holding Finnair Oyj or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Finnair Oyj
Performance |
| Timeline |
| Valneva SE ADR |
| Finnair Oyj |
Valneva SE and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Finnair Oyj
The main advantage of trading using opposite Valneva SE and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Finnair Oyj 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 Finnair Oyj will offset losses from the drop in Finnair Oyj's long position.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals |
| Finnair Oyj vs. easyJet plc | Finnair Oyj vs. Norse Atlantic ASA | Finnair Oyj vs. Air New Zealand | Finnair Oyj vs. Air China Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |