Correlation Between Valneva SE and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Valneva SE and NETGEAR 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 NETGEAR 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 NETGEAR, you can compare the effects of market volatilities on Valneva SE and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and NETGEAR.
Diversification Opportunities for Valneva SE and NETGEAR
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Valneva and NETGEAR is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Valneva SE i.e., Valneva SE and NETGEAR go up and down completely randomly.
Pair Corralation between Valneva SE and NETGEAR
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the NETGEAR. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.02 times less risky than NETGEAR. The stock trades about -0.07 of its potential returns per unit of risk. The NETGEAR is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,592 in NETGEAR on October 26, 2024 and sell it today you would earn a total of 1,224 from holding NETGEAR or generate 76.92% 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. NETGEAR
Performance |
| Timeline |
| Valneva SE ADR |
| NETGEAR |
Valneva SE and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and NETGEAR
The main advantage of trading using opposite Valneva SE and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR'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 |
| NETGEAR vs. Comtech Telecommunications Corp | NETGEAR vs. KVH Industries | NETGEAR vs. Silicom | NETGEAR vs. Knowles Cor |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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