Correlation Between Biostem Technologies and Genfit

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

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

Diversification Opportunities for Biostem Technologies and Genfit

-0.08

Correlation Coefficient

Biostem Technologies  Genfit

Good diversification

The 3 months correlation between Biostem and Genfit is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Biostem Technologies and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Biostem Technologies 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 Biostem Technologies 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 Biostem Technologies i.e., Biostem Technologies and Genfit go up and down completely randomly.

Pair Corralation between Biostem Technologies and Genfit

Given the investment horizon of 90 days Biostem Technologies is expected to generate 1.43 times more return on investment than Genfit. However, Biostem Technologies is 1.43 times more volatile than Genfit. It trades about 0.07 of its potential returns per unit of risk. Genfit is currently generating about 0.03 per unit of risk. If you would invest  930.00  in Biostem Technologies on September 24, 2024 and sell it today you would earn a total of  514.00  from holding Biostem Technologies or generate 55.27% return on investment over 90 days.

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

Biostem Technologies  vs.  Genfit

Biostem Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biostem Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Biostem Technologies displayed 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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Biostem Technologies and Genfit

The main advantage of trading using opposite Biostem Technologies and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biostem Technologies 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 Biostem Technologies 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.