Correlation Between Valneva SE and 05565EBZ7

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Can any of the company-specific risk be diversified away by investing in both Valneva SE and 05565EBZ7 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 05565EBZ7 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 BMW 325 01 APR 25, you can compare the effects of market volatilities on Valneva SE and 05565EBZ7 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 05565EBZ7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and 05565EBZ7.

Diversification Opportunities for Valneva SE and 05565EBZ7

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Valneva and 05565EBZ7 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and BMW 325 01 APR 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMW 325 01 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 05565EBZ7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMW 325 01 has no effect on the direction of Valneva SE i.e., Valneva SE and 05565EBZ7 go up and down completely randomly.

Pair Corralation between Valneva SE and 05565EBZ7

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the 05565EBZ7. In addition to that, Valneva SE is 11.56 times more volatile than BMW 325 01 APR 25. It trades about -0.05 of its total potential returns per unit of risk. BMW 325 01 APR 25 is currently generating about 0.03 per unit of volatility. If you would invest  9,701  in BMW 325 01 APR 25 on September 3, 2024 and sell it today you would earn a total of  190.00  from holding BMW 325 01 APR 25 or generate 1.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy48.48%
ValuesDaily Returns

Valneva SE ADR  vs.  BMW 325 01 APR 25

 Performance 
       Timeline  
Valneva SE ADR 

Risk-Adjusted Performance

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Over the last 90 days Valneva SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
BMW 325 01 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BMW 325 01 APR 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 05565EBZ7 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Valneva SE and 05565EBZ7 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Valneva SE and 05565EBZ7

The main advantage of trading using opposite Valneva SE and 05565EBZ7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, 05565EBZ7 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 05565EBZ7 will offset losses from the drop in 05565EBZ7's long position.
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The idea behind Valneva SE ADR and BMW 325 01 APR 25 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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