Correlation Between Valneva SE and Cequence Energy

Can any of the company-specific risk be diversified away by investing in both Valneva SE and Cequence Energy 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 Cequence Energy 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 Cequence Energy, you can compare the effects of market volatilities on Valneva SE and Cequence Energy 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 Cequence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Cequence Energy.

Diversification Opportunities for Valneva SE and Cequence Energy

0.0

Correlation Coefficient

Valneva SE  Cequence Energy

Pay attention - limited upside

The 3 months correlation between Valneva and Cequence is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Cequence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cequence Energy 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 Cequence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cequence Energy has no effect on the direction of Valneva SE i.e., Valneva SE and Cequence Energy go up and down completely randomly.

Pair Corralation between Valneva SE and Cequence Energy

If you would invest  680.00  in Valneva SE ADR on February 2, 2024 and sell it today you would earn a total of  53.00  from holding Valneva SE ADR or generate 7.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Valneva SE ADR  vs.  Cequence Energy

Valneva SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valneva SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Valneva SE is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Cequence Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cequence Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cequence Energy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Valneva SE and Cequence Energy

The main advantage of trading using opposite Valneva SE and Cequence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Cequence Energy 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 Cequence Energy will offset losses from the drop in Cequence Energy's long position.

The idea behind Valneva SE ADR and Cequence Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.