Correlation Between Voestalpine and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Voestalpine and Valneva SE 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 Voestalpine and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voestalpine AG and Valneva SE, you can compare the effects of market volatilities on Voestalpine and Valneva SE 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 Voestalpine with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voestalpine and Valneva SE.
Diversification Opportunities for Voestalpine and Valneva SE
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voestalpine and Valneva is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE and Voestalpine 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 Voestalpine AG are associated (or correlated) with Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE has no effect on the direction of Voestalpine i.e., Voestalpine and Valneva SE go up and down completely randomly.
Pair Corralation between Voestalpine and Valneva SE
Assuming the 90 days trading horizon Voestalpine AG is expected to generate 0.43 times more return on investment than Valneva SE. However, Voestalpine AG is 2.34 times less risky than Valneva SE. It trades about -0.03 of its potential returns per unit of risk. Valneva SE is currently generating about -0.04 per unit of risk. If you would invest 2,394 in Voestalpine AG on August 30, 2024 and sell it today you would lose (598.00) from holding Voestalpine AG or give up 24.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voestalpine AG vs. Valneva SE
Performance |
| Timeline |
| Voestalpine AG |
| Valneva SE |
Voestalpine and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voestalpine and Valneva SE
The main advantage of trading using opposite Voestalpine and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voestalpine position performs unexpectedly, Valneva SE 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 Valneva SE will offset losses from the drop in Valneva SE's long position.| Voestalpine vs. OMV Aktiengesellschaft | Voestalpine vs. Raiffeisen Bank International | Voestalpine vs. Andritz AG | Voestalpine vs. VERBUND AG |
| Valneva SE vs. CNH Industrial NV | Valneva SE vs. Vienna Insurance Group | Valneva SE vs. BKS Bank AG | Valneva SE vs. Raiffeisen Bank International |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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