Correlation Between Genfit and Cencora

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

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

Diversification Opportunities for Genfit and Cencora

-0.1

Correlation Coefficient

Genfit  Cencora

Good diversification

The 3 months correlation between Genfit and Cencora is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora 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 Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Genfit i.e., Genfit and Cencora go up and down completely randomly.

Pair Corralation between Genfit and Cencora

Given the investment horizon of 90 days Genfit is expected to under-perform the Cencora. In addition to that, Genfit is 1.92 times more volatile than Cencora. It trades about -0.19 of its total potential returns per unit of risk. Cencora is currently generating about -0.05 per unit of volatility. If you would invest  24,051  in Cencora on October 10, 2024 and sell it today you would lose (268.00) from holding Cencora or give up 1.11% of portfolio value over 90 days.

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

Genfit  vs.  Cencora

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.

Cencora

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cencora are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Cencora may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Genfit and Cencora

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

The idea behind Genfit and Cencora 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.