Correlation Between Genfit and Corcept Therapeutics

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

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

Diversification Opportunities for Genfit and Corcept Therapeutics

-0.61

Correlation Coefficient

Genfit  Corcept Therapeutics

Excellent diversification

The 3 months correlation between Genfit and Corcept is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Corcept Therapeutics Incorpora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corcept Therapeutics 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 Corcept Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corcept Therapeutics has no effect on the direction of Genfit i.e., Genfit and Corcept Therapeutics go up and down completely randomly.

Pair Corralation between Genfit and Corcept Therapeutics

Given the investment horizon of 90 days Genfit is expected to under-perform the Corcept Therapeutics. In addition to that, Genfit is 1.01 times more volatile than Corcept Therapeutics Incorporated. It trades about -0.34 of its total potential returns per unit of risk. Corcept Therapeutics Incorporated is currently generating about -0.01 per unit of volatility. If you would invest  5,214  in Corcept Therapeutics Incorporated on October 6, 2024 and sell it today you would lose (128.00) from holding Corcept Therapeutics Incorporated or give up 2.45% of portfolio value over 90 days.

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

Genfit  vs.  Corcept Therapeutics Incorpora

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.

Corcept Therapeutics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Corcept Therapeutics Incorporated are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Corcept Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genfit and Corcept Therapeutics

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

The idea behind Genfit and Corcept Therapeutics Incorporated 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.