Correlation Between Valneva SE and Microbot Medical

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

Diversification Opportunities for Valneva SE and Microbot Medical

-0.13

Correlation Coefficient

Valneva SE  Microbot Medical

Good diversification

The 3 months correlation between Valneva and Microbot is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical 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 Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of Valneva SE i.e., Valneva SE and Microbot Medical go up and down completely randomly.

Pair Corralation between Valneva SE and Microbot Medical

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 0.95 times more return on investment than Microbot Medical. However, Valneva SE ADR is 1.05 times less risky than Microbot Medical. It trades about 0.01 of its potential returns per unit of risk. Microbot Medical is currently generating about -0.29 per unit of risk. If you would invest  781.00  in Valneva SE ADR on January 25, 2024 and sell it today you would lose (7.00) from holding Valneva SE ADR or give up 0.9% 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.  Microbot Medical

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 newest stock price disarray, may contribute to short-term losses for the investors.

Microbot Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Microbot Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Valneva SE and Microbot Medical

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

The idea behind Valneva SE ADR and Microbot Medical 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.