Correlation Between Genfit and Satsuma Pharmaceuticals

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

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

Diversification Opportunities for Genfit and Satsuma Pharmaceuticals

-0.84

Correlation Coefficient

Genfit  Satsuma Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Genfit and Satsuma is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Satsuma Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satsuma Pharmaceuticals 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 Satsuma Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satsuma Pharmaceuticals has no effect on the direction of Genfit i.e., Genfit and Satsuma Pharmaceuticals go up and down completely randomly.

Pair Corralation between Genfit and Satsuma Pharmaceuticals

If you would invest  110.00  in Satsuma Pharmaceuticals on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Satsuma Pharmaceuticals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Genfit  vs.  Satsuma Pharmaceuticals

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.

Satsuma Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Satsuma Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Satsuma Pharmaceuticals 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 Satsuma Pharmaceuticals

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

The idea behind Genfit and Satsuma Pharmaceuticals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.