Correlation Between Genfit and CHKEZ Old

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

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

Diversification Opportunities for Genfit and CHKEZ Old

0.76

Correlation Coefficient

Genfit  CHKEZ Old

Poor diversification

The 3 months correlation between Genfit and CHKEZ is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old 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 CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of Genfit i.e., Genfit and CHKEZ Old go up and down completely randomly.

Pair Corralation between Genfit and CHKEZ Old

Given the investment horizon of 90 days Genfit is expected to generate 1.77 times more return on investment than CHKEZ Old. However, Genfit is 1.77 times more volatile than CHKEZ Old. It trades about 0.01 of its potential returns per unit of risk. CHKEZ Old is currently generating about 0.0 per unit of risk. If you would invest  461.00  in Genfit on October 25, 2024 and sell it today you would lose (101.00) from holding Genfit or give up 21.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	84.79%
Values	Daily Returns

Genfit  vs.  CHKEZ Old

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.

CHKEZ Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHKEZ Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, CHKEZ Old is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Genfit and CHKEZ Old

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

The idea behind Genfit and CHKEZ Old 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.