Correlation Between Genfit and Biostem Technologies

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

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

Diversification Opportunities for Genfit and Biostem Technologies

0.07

Correlation Coefficient

Genfit  Biostem Technologies

Significant diversification

The 3 months correlation between Genfit and Biostem is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Biostem Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biostem Technologies 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 Biostem Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biostem Technologies has no effect on the direction of Genfit i.e., Genfit and Biostem Technologies go up and down completely randomly.

Pair Corralation between Genfit and Biostem Technologies

Given the investment horizon of 90 days Genfit is expected to generate 16.09 times less return on investment than Biostem Technologies. But when comparing it to its historical volatility, Genfit is 2.26 times less risky than Biostem Technologies. It trades about 0.01 of its potential returns per unit of risk. Biostem Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  274.00  in Biostem Technologies on October 12, 2024 and sell it today you would earn a total of  1,275  from holding Biostem Technologies or generate 465.33% return on investment over 90 days.

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

Genfit  vs.  Biostem Technologies

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Biostem Technologies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biostem Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Biostem Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genfit and Biostem Technologies

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

The idea behind Genfit and Biostem Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.