Correlation Between Centessa Pharmaceuticals and Genfit
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals 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 Centessa Pharmaceuticals and Genfit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and Genfit, you can compare the effects of market volatilities on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals with a short position of Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and Genfit.
Diversification Opportunities for Centessa Pharmaceuticals and Genfit
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centessa and Genfit is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC 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 Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Genfit go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and Genfit
Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 1.24 times more return on investment than Genfit. However, Centessa Pharmaceuticals is 1.24 times more volatile than Genfit. It trades about -0.02 of its potential returns per unit of risk. Genfit is currently generating about -0.07 per unit of risk. If you would invest 1,695 in Centessa Pharmaceuticals PLC on December 1, 2024 and sell it today you would lose (140.00) from holding Centessa Pharmaceuticals PLC or give up 8.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. Genfit
Performance |
Timeline |
Centessa Pharmaceuticals |
Genfit |
Centessa Pharmaceuticals and Genfit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Centessa Pharmaceuticals and Genfit
The main advantage of trading using opposite Centessa Pharmaceuticals and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals 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.Centessa Pharmaceuticals vs. Beam Therapeutics | Centessa Pharmaceuticals vs. Editas Medicine | Centessa Pharmaceuticals vs. Caribou Biosciences | Centessa Pharmaceuticals vs. Verve Therapeutics |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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