Correlation Between Valneva SE and Viatris

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

Diversification Opportunities for Valneva SE and Viatris

0.0

Correlation Coefficient

Valneva SE  Viatris

Pay attention - limited upside

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

Pair Corralation between Valneva SE and Viatris

If you would invest  722.00  in Valneva SE ADR on February 18, 2024 and sell it today you would earn a total of  166.00  from holding Valneva SE ADR or generate 22.99% 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.  Viatris

Valneva SE ADR

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Valneva SE displayed solid returns over the last few months and may actually be approaching a breakup point.

Viatris

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viatris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Viatris is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Valneva SE and Viatris

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

The idea behind Valneva SE ADR and Viatris 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 Global Correlations module to find global opportunities by holding instruments from different markets.