Correlation Between Valneva SE and SBC Communications
Can any of the company-specific risk be diversified away by investing in both Valneva SE and SBC Communications 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 SBC Communications 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 SBC Communications, you can compare the effects of market volatilities on Valneva SE and SBC Communications 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 SBC Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and SBC Communications.
Diversification Opportunities for Valneva SE and SBC Communications
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valneva and SBC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and SBC Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBC Communications 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 SBC Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBC Communications has no effect on the direction of Valneva SE i.e., Valneva SE and SBC Communications go up and down completely randomly.
Pair Corralation between Valneva SE and SBC Communications
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 1.03 times more return on investment than SBC Communications. However, Valneva SE is 1.03 times more volatile than SBC Communications. It trades about 0.2 of its potential returns per unit of risk. SBC Communications is currently generating about -0.1 per unit of risk. If you would invest 419.00 in Valneva SE ADR on October 25, 2024 and sell it today you would earn a total of 44.00 from holding Valneva SE ADR or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. SBC Communications
Performance |
| Timeline |
| Valneva SE ADR |
| SBC Communications |
Valneva SE and SBC Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and SBC Communications
The main advantage of trading using opposite Valneva SE and SBC Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, SBC Communications 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 SBC Communications will offset losses from the drop in SBC Communications' long position.| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
| SBC Communications vs. Valneva SE ADR | SBC Communications vs. Arrow Electronics | SBC Communications vs. Sellas Life Sciences | SBC Communications vs. Spyre Therapeutics |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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