Correlation Between SPDR Barclays and Genfit

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

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

Diversification Opportunities for SPDR Barclays and Genfit

-0.84

Correlation Coefficient

SPDR Barclays  Genfit

Pay attention - limited upside

The 3 months correlation between SPDR and Genfit is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Euro and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and SPDR Barclays 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 SPDR Barclays Euro 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 SPDR Barclays i.e., SPDR Barclays and Genfit go up and down completely randomly.

Pair Corralation between SPDR Barclays and Genfit

Assuming the 90 days trading horizon SPDR Barclays is expected to generate 2.95 times less return on investment than Genfit. But when comparing it to its historical volatility, SPDR Barclays Euro is 5.7 times less risky than Genfit. It trades about 0.06 of its potential returns per unit of risk. Genfit is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  316.00  in Genfit on October 5, 2024 and sell it today you would earn a total of  49.00  from holding Genfit or generate 15.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.08%
Values	Daily Returns

SPDR Barclays Euro  vs.  Genfit

SPDR Barclays Euro

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Barclays Euro are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SPDR Barclays is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SPDR Barclays and Genfit

The main advantage of trading using opposite SPDR Barclays and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays 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 SPDR Barclays Euro 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.