Correlation Between Quantum Genomics and Genfit

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

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

Diversification Opportunities for Quantum Genomics and Genfit

0.04

Correlation Coefficient

Quantum Genomics  Genfit

Significant diversification

The 3 months correlation between Quantum and Genfit is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Quantum Genomics SA and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Quantum Genomics 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 Quantum Genomics SA 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 Quantum Genomics i.e., Quantum Genomics and Genfit go up and down completely randomly.

Pair Corralation between Quantum Genomics and Genfit

Assuming the 90 days trading horizon Quantum Genomics SA is expected to generate 5.46 times more return on investment than Genfit. However, Quantum Genomics is 5.46 times more volatile than Genfit. It trades about 0.05 of its potential returns per unit of risk. Genfit is currently generating about 0.01 per unit of risk. If you would invest  13.00  in Quantum Genomics SA on September 28, 2024 and sell it today you would lose (5.79) from holding Quantum Genomics SA or give up 44.54% of portfolio value over 90 days.

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

Quantum Genomics SA  vs.  Genfit

Quantum Genomics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantum Genomics SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Quantum Genomics and Genfit

The main advantage of trading using opposite Quantum Genomics and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantum Genomics 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 Quantum Genomics SA 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.