Correlation Between Valneva SE and STORE

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Can any of the company-specific risk be diversified away by investing in both Valneva SE and STORE 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 STORE 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 STORE CAP P, you can compare the effects of market volatilities on Valneva SE and STORE 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 STORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and STORE.

Diversification Opportunities for Valneva SE and STORE

0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Valneva and STORE is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and STORE CAP P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE CAP P 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 STORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE CAP P has no effect on the direction of Valneva SE i.e., Valneva SE and STORE go up and down completely randomly.

Pair Corralation between Valneva SE and STORE

Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the STORE. In addition to that, Valneva SE is 1.76 times more volatile than STORE CAP P. It trades about -0.34 of its total potential returns per unit of risk. STORE CAP P is currently generating about 0.02 per unit of volatility. If you would invest  9,774  in STORE CAP P on September 3, 2024 and sell it today you would earn a total of  98.00  from holding STORE CAP P or generate 1.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy67.19%
ValuesDaily Returns

Valneva SE ADR  vs.  STORE CAP P

 Performance 
       Timeline  
Valneva SE ADR 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
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.
STORE CAP P 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in STORE CAP P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, STORE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Valneva SE and STORE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Valneva SE and STORE

The main advantage of trading using opposite Valneva SE and STORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, STORE 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 STORE will offset losses from the drop in STORE's long position.
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The idea behind Valneva SE ADR and STORE CAP P 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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