Correlation Between Genfit and Equinix

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

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

Diversification Opportunities for Genfit and Equinix

-0.69

Correlation Coefficient

Genfit  Equinix

Excellent diversification

The 3 months correlation between Genfit and Equinix is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix 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 Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Genfit i.e., Genfit and Equinix go up and down completely randomly.

Pair Corralation between Genfit and Equinix

Given the investment horizon of 90 days Genfit is expected to under-perform the Equinix. In addition to that, Genfit is 1.19 times more volatile than Equinix. It trades about -0.18 of its total potential returns per unit of risk. Equinix is currently generating about -0.01 per unit of volatility. If you would invest  92,157  in Equinix on October 20, 2024 and sell it today you would lose (598.00) from holding Equinix or give up 0.65% of portfolio value over 90 days.

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

Genfit  vs.  Equinix

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.

Equinix

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Equinix are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Equinix 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 Equinix

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

The idea behind Genfit and Equinix 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.