Correlation Between Genfit and Launch One

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

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

Diversification Opportunities for Genfit and Launch One

-0.94

Correlation Coefficient

Genfit  Launch One

Pay attention - limited upside

The 3 months correlation between Genfit and Launch is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Launch One Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Launch One Acquisition 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 Launch One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Launch One Acquisition has no effect on the direction of Genfit i.e., Genfit and Launch One go up and down completely randomly.

Pair Corralation between Genfit and Launch One

Given the investment horizon of 90 days Genfit is expected to generate 49.56 times more return on investment than Launch One. However, Genfit is 49.56 times more volatile than Launch One Acquisition. It trades about 0.01 of its potential returns per unit of risk. Launch One Acquisition is currently generating about 0.13 per unit of risk. If you would invest  431.00  in Genfit on October 11, 2024 and sell it today you would lose (64.00) from holding Genfit or give up 14.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	17.98%
Values	Daily Returns

Genfit  vs.  Launch One Acquisition

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.

Launch One Acquisition

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Launch One Acquisition are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Launch One 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 Launch One

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

The idea behind Genfit and Launch One Acquisition 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.