Correlation Between Genfit and Protara Therapeutics
Can any of the company-specific risk be diversified away by investing in both Genfit and Protara 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 Protara Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and Protara Therapeutics, you can compare the effects of market volatilities on Genfit and Protara 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 Protara Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and Protara Therapeutics.
Diversification Opportunities for Genfit and Protara Therapeutics
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Genfit and Protara is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Protara Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protara 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 Protara Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protara Therapeutics has no effect on the direction of Genfit i.e., Genfit and Protara Therapeutics go up and down completely randomly.
Pair Corralation between Genfit and Protara Therapeutics
Given the investment horizon of 90 days Genfit is expected to generate 10.71 times less return on investment than Protara Therapeutics. But when comparing it to its historical volatility, Genfit is 1.9 times less risky than Protara Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Protara Therapeutics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 196.00 in Protara Therapeutics on September 24, 2024 and sell it today you would earn a total of 343.00 from holding Protara Therapeutics or generate 175.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Genfit vs. Protara Therapeutics
Performance |
Timeline |
Genfit |
Protara Therapeutics |
Genfit and Protara Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Genfit and Protara Therapeutics
The main advantage of trading using opposite Genfit and Protara Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, Protara 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 Protara Therapeutics will offset losses from the drop in Protara Therapeutics' long position.Genfit vs. Fate Therapeutics | Genfit vs. Sana Biotechnology | Genfit vs. Caribou Biosciences | Genfit vs. Arcus Biosciences |
Protara Therapeutics vs. Vaccinex | Protara Therapeutics vs. Monopar Therapeutics | Protara Therapeutics vs. Surrozen | Protara Therapeutics vs. Ikena Oncology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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