Correlation Between Genfit and Nanobiotix

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

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

Diversification Opportunities for Genfit and Nanobiotix

0.59

Correlation Coefficient

Genfit  Nanobiotix

Very weak diversification

The 3 months correlation between Genfit and Nanobiotix is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Nanobiotix SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanobiotix 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 Nanobiotix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanobiotix SA has no effect on the direction of Genfit i.e., Genfit and Nanobiotix go up and down completely randomly.

Pair Corralation between Genfit and Nanobiotix

Assuming the 90 days trading horizon Genfit is expected to generate 1.25 times more return on investment than Nanobiotix. However, Genfit is 1.25 times more volatile than Nanobiotix SA. It trades about -0.01 of its potential returns per unit of risk. Nanobiotix SA is currently generating about -0.14 per unit of risk. If you would invest  378.00  in Genfit on September 12, 2024 and sell it today you would lose (22.00) from holding Genfit or give up 5.82% of portfolio value over 90 days.

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

Genfit  vs.  Nanobiotix 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 somewhat strong basic indicators, Genfit is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Nanobiotix SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanobiotix 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 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.

Pair Trading with Genfit and Nanobiotix

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

The idea behind Genfit and Nanobiotix 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.