Correlation Between Western Digital and Valneva SE
Can any of the company-specific risk be diversified away by investing in both Western Digital 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 Western Digital and Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Digital and Valneva SE ADR, you can compare the effects of market volatilities on Western Digital 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 Western Digital with a short position of Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Digital and Valneva SE.
Diversification Opportunities for Western Digital and Valneva SE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Valneva is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Western Digital and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR and Western Digital 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 Western Digital 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 ADR has no effect on the direction of Western Digital i.e., Western Digital and Valneva SE go up and down completely randomly.
Pair Corralation between Western Digital and Valneva SE
Considering the 90-day investment horizon Western Digital is expected to generate 0.88 times more return on investment than Valneva SE. However, Western Digital is 1.13 times less risky than Valneva SE. It trades about -0.04 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.44 per unit of risk. If you would invest 6,776 in Western Digital on August 23, 2024 and sell it today you would lose (188.00) from holding Western Digital or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Digital vs. Valneva SE ADR
Performance |
| Timeline |
| Western Digital |
| Valneva SE ADR |
Western Digital and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Digital and Valneva SE
The main advantage of trading using opposite Western Digital and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Digital 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.| Western Digital vs. NetApp Inc | Western Digital vs. Logitech International SA | Western Digital vs. HP Inc | Western Digital vs. Dell Technologies |
| Valneva SE vs. Kiora Pharmaceuticals | Valneva SE vs. ZyVersa Therapeutics | Valneva SE vs. Sonnet Biotherapeutics Holdings | Valneva SE vs. Zura Bio Limited |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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