Correlation Between Valneva SE and HE Equipment
Can any of the company-specific risk be diversified away by investing in both Valneva SE and HE Equipment 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 HE Equipment 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 HE Equipment Services, you can compare the effects of market volatilities on Valneva SE and HE Equipment 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 HE Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and HE Equipment.
Diversification Opportunities for Valneva SE and HE Equipment
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Valneva and HEES is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and HE Equipment Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HE Equipment Services 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 HE Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HE Equipment Services has no effect on the direction of Valneva SE i.e., Valneva SE and HE Equipment go up and down completely randomly.
Pair Corralation between Valneva SE and HE Equipment
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the HE Equipment. In addition to that, Valneva SE is 1.13 times more volatile than HE Equipment Services. It trades about -0.29 of its total potential returns per unit of risk. HE Equipment Services is currently generating about 0.19 per unit of volatility. If you would invest 4,255 in HE Equipment Services on September 12, 2024 and sell it today you would earn a total of 1,416 from holding HE Equipment Services or generate 33.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. HE Equipment Services
Performance |
| Timeline |
| Valneva SE ADR |
| HE Equipment Services |
Valneva SE and HE Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and HE Equipment
The main advantage of trading using opposite Valneva SE and HE Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, HE Equipment 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 HE Equipment will offset losses from the drop in HE Equipment'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 |
| HE Equipment vs. GATX Corporation | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Alta Equipment Group | HE Equipment vs. Ryder System |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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