Correlation Between Valneva SE and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Fast Retailing 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 Fast Retailing 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 Fast Retailing Co, you can compare the effects of market volatilities on Valneva SE and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Fast Retailing.
Diversification Opportunities for Valneva SE and Fast Retailing
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valneva and Fast is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Valneva SE i.e., Valneva SE and Fast Retailing go up and down completely randomly.
Pair Corralation between Valneva SE and Fast Retailing
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Fast Retailing. In addition to that, Valneva SE is 2.39 times more volatile than Fast Retailing Co. It trades about -0.62 of its total potential returns per unit of risk. Fast Retailing Co is currently generating about -0.11 per unit of volatility. If you would invest 33,100 in Fast Retailing Co on August 30, 2024 and sell it today you would lose (1,035) from holding Fast Retailing Co or give up 3.13% 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. Fast Retailing Co
Performance |
| Timeline |
| Valneva SE ADR |
| Fast Retailing |
Valneva SE and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Fast Retailing
The main advantage of trading using opposite Valneva SE and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Valneva SE vs. Bright Minds Biosciences | Valneva SE vs. HP Inc | Valneva SE vs. Intel | Valneva SE vs. Chevron Corp |
| Fast Retailing vs. Shoe Carnival | Fast Retailing vs. Genesco | Fast Retailing vs. Ross Stores | Fast Retailing vs. Burlington Stores |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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