Correlation Between Valneva SE and A SPAC

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

Diversification Opportunities for Valneva SE and A SPAC

0.29

Correlation Coefficient

Valneva SE  A SPAC

Modest diversification

The 3 months correlation between Valneva and ASPC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and A SPAC III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC III 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 A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC III has no effect on the direction of Valneva SE i.e., Valneva SE and A SPAC go up and down completely randomly.

Pair Corralation between Valneva SE and A SPAC

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 23.61 times more return on investment than A SPAC. However, Valneva SE is 23.61 times more volatile than A SPAC III. It trades about 0.18 of its potential returns per unit of risk. A SPAC III is currently generating about 0.13 per unit of risk. If you would invest  645.00  in Valneva SE ADR on May 11, 2025 and sell it today you would earn a total of  266.00  from holding Valneva SE ADR or generate 41.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Valneva SE ADR  vs.  A SPAC III

Valneva SE ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE ADR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Valneva SE displayed solid returns over the last few months and may actually be approaching a breakup point.

A SPAC III

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in A SPAC III are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, A SPAC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Valneva SE and A SPAC

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

The idea behind Valneva SE ADR and A SPAC III 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.