Correlation Between Genfit and SPDR Barclays

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

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

Diversification Opportunities for Genfit and SPDR Barclays

-0.84

Correlation Coefficient

Genfit  SPDR Barclays

Pay attention - limited upside

The 3 months correlation between Genfit and SPDR is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and SPDR Barclays Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Euro 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Euro has no effect on the direction of Genfit i.e., Genfit and SPDR Barclays go up and down completely randomly.

Pair Corralation between Genfit and SPDR Barclays

Assuming the 90 days trading horizon Genfit is expected to under-perform the SPDR Barclays. In addition to that, Genfit is 11.0 times more volatile than SPDR Barclays Euro. It trades about -0.12 of its total potential returns per unit of risk. SPDR Barclays Euro is currently generating about -0.32 per unit of volatility. If you would invest  5,441  in SPDR Barclays Euro on October 5, 2024 and sell it today you would lose (60.00) from holding SPDR Barclays Euro or give up 1.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Genfit  vs.  SPDR Barclays Euro

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.

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.

Pair Trading with Genfit and SPDR Barclays

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

The idea behind Genfit and SPDR Barclays Euro 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.