Correlation Between Valneva SE and Bio Rad
Can any of the company-specific risk be diversified away by investing in both Valneva SE and Bio Rad 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 Bio Rad 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 Bio Rad Laboratories, you can compare the effects of market volatilities on Valneva SE and Bio Rad 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 Bio Rad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Bio Rad.
Diversification Opportunities for Valneva SE and Bio Rad
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valneva and Bio is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Bio Rad Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Rad Laboratories 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 Bio Rad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Rad Laboratories has no effect on the direction of Valneva SE i.e., Valneva SE and Bio Rad go up and down completely randomly.
Pair Corralation between Valneva SE and Bio Rad
Given the investment horizon of 90 days Valneva SE ADR is expected to generate 2.73 times more return on investment than Bio Rad. However, Valneva SE is 2.73 times more volatile than Bio Rad Laboratories. It trades about -0.01 of its potential returns per unit of risk. Bio Rad Laboratories is currently generating about -0.05 per unit of risk. If you would invest 2,478 in Valneva SE ADR on January 29, 2024 and sell it today you would lose (1,714) from holding Valneva SE ADR or give up 69.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Valneva SE ADR vs. Bio Rad Laboratories
Performance |
Timeline |
Valneva SE ADR |
Bio Rad Laboratories |
Valneva SE and Bio Rad Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Valneva SE and Bio Rad
The main advantage of trading using opposite Valneva SE and Bio Rad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Bio Rad 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 Bio Rad will offset losses from the drop in Bio Rad's long position.Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
Bio Rad vs. Molecular Partners AG | Bio Rad vs. MediciNova | Bio Rad vs. Anebulo Pharmaceuticals | Bio Rad vs. Eliem Therapeutics |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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