Correlation Between Genfit and WEBTOON Entertainment

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

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

Diversification Opportunities for Genfit and WEBTOON Entertainment

-0.81

Correlation Coefficient

Genfit  WEBTOON Entertainment

Pay attention - limited upside

The 3 months correlation between Genfit and WEBTOON is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment 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 WEBTOON Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBTOON Entertainment has no effect on the direction of Genfit i.e., Genfit and WEBTOON Entertainment go up and down completely randomly.

Pair Corralation between Genfit and WEBTOON Entertainment

Given the investment horizon of 90 days Genfit is expected to generate 1.13 times more return on investment than WEBTOON Entertainment. However, Genfit is 1.13 times more volatile than WEBTOON Entertainment Common. It trades about -0.04 of its potential returns per unit of risk. WEBTOON Entertainment Common is currently generating about -0.04 per unit of risk. If you would invest  367.00  in Genfit on October 25, 2024 and sell it today you would lose (7.00) from holding Genfit or give up 1.91% of portfolio value over 90 days.

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

Genfit  vs.  WEBTOON Entertainment Common

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.

WEBTOON Entertainment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WEBTOON Entertainment Common are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, WEBTOON Entertainment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genfit and WEBTOON Entertainment

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

The idea behind Genfit and WEBTOON Entertainment Common 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.