Correlation Between Valneva SE and CbdMD
Can any of the company-specific risk be diversified away by investing in both Valneva SE and CbdMD 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 CbdMD 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 cbdMD Inc, you can compare the effects of market volatilities on Valneva SE and CbdMD 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 CbdMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and CbdMD.
Diversification Opportunities for Valneva SE and CbdMD
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valneva and CbdMD is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and cbdMD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cbdMD Inc 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 CbdMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cbdMD Inc has no effect on the direction of Valneva SE i.e., Valneva SE and CbdMD go up and down completely randomly.
Pair Corralation between Valneva SE and CbdMD
Given the investment horizon of 90 days Valneva SE ADR is expected to under-perform the CbdMD. But the stock apears to be less risky and, when comparing its historical volatility, Valneva SE ADR is 1.86 times less risky than CbdMD. The stock trades about -0.09 of its potential returns per unit of risk. The cbdMD Inc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 142.00 in cbdMD Inc on August 28, 2024 and sell it today you would lose (95.00) from holding cbdMD Inc or give up 66.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE ADR vs. cbdMD Inc
Performance |
| Timeline |
| Valneva SE ADR |
| cbdMD Inc |
Valneva SE and CbdMD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and CbdMD
The main advantage of trading using opposite Valneva SE and CbdMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, CbdMD 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 CbdMD will offset losses from the drop in CbdMD's long position.| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals |
| CbdMD vs. Capricor Therapeutics | CbdMD vs. Soleno Therapeutics | CbdMD vs. Bio Path Holdings | CbdMD vs. Moleculin Biotech |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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