Correlation Between Valneva SE and SWK Holdings
Can any of the company-specific risk be diversified away by investing in both Valneva SE and SWK Holdings 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 SWK Holdings 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 SWK Holdings, you can compare the effects of market volatilities on Valneva SE and SWK Holdings 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 SWK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and SWK Holdings.
Diversification Opportunities for Valneva SE and SWK Holdings
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Valneva and SWK is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and SWK Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWK Holdings 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 SWK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWK Holdings has no effect on the direction of Valneva SE i.e., Valneva SE and SWK Holdings go up and down completely randomly.
Pair Corralation between Valneva SE and SWK Holdings
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the SWK Holdings. In addition to that, Valneva SE is 8.08 times more volatile than SWK Holdings. It trades about -0.2 of its total potential returns per unit of risk. SWK Holdings is currently generating about 0.12 per unit of volatility. If you would invest 2,412 in SWK Holdings on August 29, 2024 and sell it today you would earn a total of 139.00 from holding SWK Holdings or generate 5.76% 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. SWK Holdings
Performance |
| Timeline |
| Valneva SE ADR |
| SWK Holdings |
Valneva SE and SWK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and SWK Holdings
The main advantage of trading using opposite Valneva SE and SWK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, SWK Holdings 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 SWK Holdings will offset losses from the drop in SWK Holdings' long position.| Valneva SE vs. Bright Minds Biosciences | Valneva SE vs. HP Inc | Valneva SE vs. Intel | Valneva SE vs. Chevron Corp |
| SWK Holdings vs. PACCAR Inc | SWK Holdings vs. Pure Cycle | SWK Holdings vs. Adient PLC | SWK Holdings vs. Kenon Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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