Correlation Between Genfit and Boiron SA

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

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

Diversification Opportunities for Genfit and Boiron SA

0.94

Correlation Coefficient

Genfit  Boiron SA

Almost no diversification

The 3 months correlation between Genfit and Boiron is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of Genfit i.e., Genfit and Boiron SA go up and down completely randomly.

Pair Corralation between Genfit and Boiron SA

Assuming the 90 days trading horizon Genfit is expected to under-perform the Boiron SA. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.21 times less risky than Boiron SA. The stock trades about -0.34 of its potential returns per unit of risk. The Boiron SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,650  in Boiron SA on September 28, 2024 and sell it today you would earn a total of  20.00  from holding Boiron SA or generate 0.75% return on investment over 90 days.

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

Genfit  vs.  Boiron 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Boiron SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boiron SA 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 forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Genfit and Boiron SA

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

The idea behind Genfit and Boiron 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.