Correlation Between Custom Truck and Genfit

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

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

Diversification Opportunities for Custom Truck and Genfit

-0.76

Correlation Coefficient

Custom Truck  Genfit

Pay attention - limited upside

The 3 months correlation between Custom and Genfit is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Custom Truck One and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Custom Truck 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 Custom Truck One 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 Custom Truck i.e., Custom Truck and Genfit go up and down completely randomly.

Pair Corralation between Custom Truck and Genfit

Given the investment horizon of 90 days Custom Truck One is expected to under-perform the Genfit. In addition to that, Custom Truck is 1.2 times more volatile than Genfit. It trades about -0.38 of its total potential returns per unit of risk. Genfit is currently generating about -0.16 per unit of volatility. If you would invest  400.00  in Genfit on October 10, 2024 and sell it today you would lose (27.00) from holding Genfit or give up 6.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Custom Truck One  vs.  Genfit

Custom Truck One

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Custom Truck 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 Custom Truck and Genfit

The main advantage of trading using opposite Custom Truck and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck 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 Custom Truck One 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 Global Correlations module to find global opportunities by holding instruments from different markets.