Correlation Between Genfit and Allient

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

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

Diversification Opportunities for Genfit and Allient

-0.84

Correlation Coefficient

Genfit  Allient

Pay attention - limited upside

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

Pair Corralation between Genfit and Allient

Given the investment horizon of 90 days Genfit is expected to under-perform the Allient. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.13 times less risky than Allient. The stock trades about -0.3 of its potential returns per unit of risk. The Allient is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  2,462  in Allient on September 22, 2024 and sell it today you would lose (114.00) from holding Allient or give up 4.63% of portfolio value over 90 days.

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

Genfit  vs.  Allient

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. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Allient

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genfit and Allient

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

The idea behind Genfit and Allient 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.