Correlation Between Enliven Therapeutics and Genfit

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

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

Diversification Opportunities for Enliven Therapeutics and Genfit

0.34

Correlation Coefficient

Enliven Therapeutics  Genfit

Weak diversification

The 3 months correlation between Enliven and Genfit is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Enliven Therapeutics and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Enliven Therapeutics 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 Enliven Therapeutics 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 Enliven Therapeutics i.e., Enliven Therapeutics and Genfit go up and down completely randomly.

Pair Corralation between Enliven Therapeutics and Genfit

Given the investment horizon of 90 days Enliven Therapeutics is expected to under-perform the Genfit. In addition to that, Enliven Therapeutics is 1.02 times more volatile than Genfit. It trades about -0.01 of its total potential returns per unit of risk. Genfit is currently generating about 0.01 per unit of volatility. If you would invest  369.00  in Genfit on December 29, 2024 and sell it today you would lose (2.00) from holding Genfit or give up 0.54% of portfolio value over 90 days.

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

Enliven Therapeutics  vs.  Genfit

Enliven Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enliven Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Enliven Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Genfit

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Genfit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Genfit is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Enliven Therapeutics and Genfit

The main advantage of trading using opposite Enliven Therapeutics and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enliven Therapeutics 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 Enliven Therapeutics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.