Correlation Between Valneva SE and GT Biopharma
Can any of the company-specific risk be diversified away by investing in both Valneva SE and GT Biopharma 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 GT Biopharma 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 GT Biopharma, you can compare the effects of market volatilities on Valneva SE and GT Biopharma 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 GT Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and GT Biopharma.
Diversification Opportunities for Valneva SE and GT Biopharma
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Valneva and GTBP is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and GT Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Biopharma 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 GT Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Biopharma has no effect on the direction of Valneva SE i.e., Valneva SE and GT Biopharma go up and down completely randomly.
Pair Corralation between Valneva SE and GT Biopharma
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the GT Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 2.95 times less risky than GT Biopharma. The stock trades about -0.1 of its potential returns per unit of risk. The GT Biopharma is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,020 in GT Biopharma on September 12, 2024 and sell it today you would lose (716.00) from holding GT Biopharma or give up 70.2% 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. GT Biopharma
Performance |
| Timeline |
| Valneva SE ADR |
| GT Biopharma |
Valneva SE and GT Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and GT Biopharma
The main advantage of trading using opposite Valneva SE and GT Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, GT Biopharma 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 GT Biopharma will offset losses from the drop in GT Biopharma'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 |
| GT Biopharma vs. Allarity Therapeutics | GT Biopharma vs. Neurobo Pharmaceuticals | GT Biopharma vs. Virax Biolabs Group | GT Biopharma vs. Quoin Pharmaceuticals Ltd |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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