Correlation Between Valneva SE and TG Therapeutics
Can any of the company-specific risk be diversified away by investing in both Valneva SE and TG Therapeutics 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 TG Therapeutics 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 TG Therapeutics, you can compare the effects of market volatilities on Valneva SE and TG Therapeutics 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 TG Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and TG Therapeutics.
Diversification Opportunities for Valneva SE and TG Therapeutics
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Valneva and TGTX is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and TG Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TG Therapeutics 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 TG Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TG Therapeutics has no effect on the direction of Valneva SE i.e., Valneva SE and TG Therapeutics go up and down completely randomly.
Pair Corralation between Valneva SE and TG Therapeutics
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the TG Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.16 times less risky than TG Therapeutics. The stock trades about -0.08 of its potential returns per unit of risk. The TG Therapeutics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,261 in TG Therapeutics on November 2, 2024 and sell it today you would earn a total of 1,075 from holding TG Therapeutics or generate 47.55% 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. TG Therapeutics
Performance |
| Timeline |
| Valneva SE ADR |
| TG Therapeutics |
Valneva SE and TG Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and TG Therapeutics
The main advantage of trading using opposite Valneva SE and TG Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, TG Therapeutics 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 TG Therapeutics will offset losses from the drop in TG Therapeutics' long position.| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
| TG Therapeutics vs. Madrigal Pharmaceuticals | TG Therapeutics vs. Terns Pharmaceuticals | TG Therapeutics vs. Hepion Pharmaceuticals | TG Therapeutics vs. Exelixis |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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