Correlation Between Valneva SE and PGE Corp
Can any of the company-specific risk be diversified away by investing in both Valneva SE and PGE Corp 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 PGE Corp 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 PGE Corp, you can compare the effects of market volatilities on Valneva SE and PGE Corp 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 PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and PGE Corp.
Diversification Opportunities for Valneva SE and PGE Corp
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Valneva and PGE is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp 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 PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of Valneva SE i.e., Valneva SE and PGE Corp go up and down completely randomly.
Pair Corralation between Valneva SE and PGE Corp
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the PGE Corp. In addition to that, Valneva SE is 3.58 times more volatile than PGE Corp. It trades about -0.49 of its total potential returns per unit of risk. PGE Corp is currently generating about 0.38 per unit of volatility. If you would invest 2,022 in PGE Corp on September 1, 2024 and sell it today you would earn a total of 141.00 from holding PGE Corp or generate 6.97% 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. PGE Corp
Performance |
| Timeline |
| Valneva SE ADR |
| PGE Corp |
Valneva SE and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and PGE Corp
The main advantage of trading using opposite Valneva SE and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, PGE Corp 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 PGE Corp will offset losses from the drop in PGE Corp'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 |
| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp vs. Pinnacle West Capital |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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