Correlation Between Valneva SE and Valuence Merger
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Valuence Merger 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 Valuence Merger 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 Valuence Merger Corp, you can compare the effects of market volatilities on Valneva SE and Valuence Merger 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 Valuence Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Valuence Merger.
Diversification Opportunities for Valneva SE and Valuence Merger
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Valneva and Valuence is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Valuence Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valuence Merger Corp 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 Valuence Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valuence Merger Corp has no effect on the direction of Valneva SE i.e., Valneva SE and Valuence Merger go up and down completely randomly.
Pair Corralation between Valneva SE and Valuence Merger
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the Valuence Merger. In addition to that, Valneva SE is 1.31 times more volatile than Valuence Merger Corp. It trades about -0.34 of its total potential returns per unit of risk. Valuence Merger Corp is currently generating about -0.02 per unit of volatility. If you would invest 1,201 in Valuence Merger Corp on September 2, 2024 and sell it today you would lose (51.00) from holding Valuence Merger Corp or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. Valuence Merger Corp
Performance |
| Timeline |
| Valneva SE ADR |
| Valuence Merger Corp |
Valneva SE and Valuence Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and Valuence Merger
The main advantage of trading using opposite Valneva SE and Valuence Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Valuence Merger 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 Valuence Merger will offset losses from the drop in Valuence Merger's long position.| Valneva SE vs. Tff Pharmaceuticals | Valneva SE vs. Eliem Therapeutics | Valneva SE vs. Inhibrx | Valneva SE vs. Enliven Therapeutics |
| Valuence Merger vs. Mesa Air Group | Valuence Merger vs. Saia Inc | Valuence Merger vs. Delek Logistics Partners | Valuence Merger vs. Canlan Ice Sports |
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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