Correlation Between Allient and Genfit

Can any of the company-specific risk be diversified away by investing in both Allient and Genfit 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 Allient and Genfit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allient and Genfit, you can compare the effects of market volatilities on Allient and Genfit 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 Allient with a short position of Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Genfit.

Diversification Opportunities for Allient and Genfit

-0.87

Correlation Coefficient

Allient  Genfit

Pay attention - limited upside

The 3 months correlation between Allient and Genfit is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Allient 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 Allient are associated (or correlated) with Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Allient i.e., Allient and Genfit go up and down completely randomly.

Pair Corralation between Allient and Genfit

Given the investment horizon of 90 days Allient is expected to under-perform the Genfit. But the stock apears to be less risky and, when comparing its historical volatility, Allient is 1.33 times less risky than Genfit. The stock trades about -0.02 of its potential returns per unit of risk. The Genfit is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  410.00  in Genfit on October 3, 2024 and sell it today you would lose (38.00) from holding Genfit or give up 9.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Allient  vs.  Genfit

Allient

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Genfit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genfit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Allient and Genfit

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

The idea behind Allient and Genfit 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.