Correlation Between Genfit and Medesis Pharma

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

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

Diversification Opportunities for Genfit and Medesis Pharma

0.51

Correlation Coefficient

Genfit  Medesis Pharma

Very weak diversification

The 3 months correlation between Genfit and Medesis is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Medesis Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medesis Pharma SA and Genfit 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 Genfit are associated (or correlated) with Medesis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medesis Pharma SA has no effect on the direction of Genfit i.e., Genfit and Medesis Pharma go up and down completely randomly.

Pair Corralation between Genfit and Medesis Pharma

Assuming the 90 days trading horizon Genfit is expected to generate 0.43 times more return on investment than Medesis Pharma. However, Genfit is 2.32 times less risky than Medesis Pharma. It trades about 0.03 of its potential returns per unit of risk. Medesis Pharma SA is currently generating about -0.01 per unit of risk. 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 Together
Strength	Weak
Accuracy	99.68%
Values	Daily Returns

Genfit  vs.  Medesis Pharma SA

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.

Medesis Pharma SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medesis Pharma SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Medesis Pharma is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Genfit and Medesis Pharma

The main advantage of trading using opposite Genfit and Medesis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, Medesis Pharma 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 Medesis Pharma will offset losses from the drop in Medesis Pharma's long position.

The idea behind Genfit and Medesis Pharma SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.