Correlation Between Genfit and Vor Biopharma

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

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

Diversification Opportunities for Genfit and Vor Biopharma

-0.66

Correlation Coefficient

Genfit  Vor Biopharma

Excellent diversification

The 3 months correlation between Genfit and Vor is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Vor Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vor Biopharma 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 Vor Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vor Biopharma has no effect on the direction of Genfit i.e., Genfit and Vor Biopharma go up and down completely randomly.

Pair Corralation between Genfit and Vor Biopharma

Given the investment horizon of 90 days Genfit is expected to under-perform the Vor Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.3 times less risky than Vor Biopharma. The stock trades about 0.0 of its potential returns per unit of risk. The Vor Biopharma is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Vor Biopharma on September 13, 2024 and sell it today you would lose (5.06) from holding Vor Biopharma or give up 4.82% of portfolio value over 90 days.

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

Genfit  vs.  Vor Biopharma

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 comparatively stable technical and fundamental indicators, Genfit is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Vor Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vor Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Vor Biopharma is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Genfit and Vor Biopharma

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

The idea behind Genfit and Vor Biopharma 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.