Correlation Between Valneva SE and GMS
Can any of the company-specific risk be diversified away by investing in both Valneva SE and GMS 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 GMS 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 GMS Inc, you can compare the effects of market volatilities on Valneva SE and GMS 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 GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and GMS.
Diversification Opportunities for Valneva SE and GMS
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Valneva and GMS is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS 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 GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Valneva SE i.e., Valneva SE and GMS go up and down completely randomly.
Pair Corralation between Valneva SE and GMS
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the GMS. In addition to that, Valneva SE is 1.52 times more volatile than GMS Inc. It trades about -0.46 of its total potential returns per unit of risk. GMS Inc is currently generating about 0.31 per unit of volatility. If you would invest 8,989 in GMS Inc on August 26, 2024 and sell it today you would earn a total of 1,181 from holding GMS Inc or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. GMS Inc
Performance |
| Timeline |
| Valneva SE ADR |
| GMS Inc |
Valneva SE and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and GMS
The main advantage of trading using opposite Valneva SE and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, GMS 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 GMS will offset losses from the drop in GMS's long position.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals |
| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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