Correlation Between Valneva SE and Net Lease
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Net Lease 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 Net Lease 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 Net Lease Office, you can compare the effects of market volatilities on Valneva SE and Net Lease 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 Net Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Net Lease.
Diversification Opportunities for Valneva SE and Net Lease
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Valneva and Net is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Net Lease Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Net Lease Office 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 Net Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Net Lease Office has no effect on the direction of Valneva SE i.e., Valneva SE and Net Lease go up and down completely randomly.
Pair Corralation between Valneva SE and Net Lease
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 5.36 times more return on investment than Net Lease. However, Valneva SE is 5.36 times more volatile than Net Lease Office. It trades about 0.22 of its potential returns per unit of risk. Net Lease Office is currently generating about 0.08 per unit of risk. If you would invest 507.00 in Valneva SE ADR on November 30, 2024 and sell it today you would earn a total of 182.00 from holding Valneva SE ADR or generate 35.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Net Lease Office
Performance |
| Timeline |
| Valneva SE ADR |
| Net Lease Office |
Valneva SE and Net Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Net Lease
The main advantage of trading using opposite Valneva SE and Net Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Net Lease 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 Net Lease will offset losses from the drop in Net Lease's long position.| Valneva SE vs. NuCana PLC | ||
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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