Correlation Between Genfit and Y MAbs

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Can any of the company-specific risk be diversified away by investing in both Genfit and Y MAbs 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 Y MAbs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and Y mAbs Therapeutics, you can compare the effects of market volatilities on Genfit and Y MAbs 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 Y MAbs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and Y MAbs.

Diversification Opportunities for Genfit and Y MAbs

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Genfit and YMAB is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Y mAbs Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Y mAbs 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 Y MAbs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Y mAbs Therapeutics has no effect on the direction of Genfit i.e., Genfit and Y MAbs go up and down completely randomly.

Pair Corralation between Genfit and Y MAbs

Given the investment horizon of 90 days Genfit is expected to under-perform the Y MAbs. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.46 times less risky than Y MAbs. The stock trades about -0.44 of its potential returns per unit of risk. The Y mAbs Therapeutics is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest  1,318  in Y mAbs Therapeutics on September 14, 2024 and sell it today you would lose (341.00) from holding Y mAbs Therapeutics or give up 25.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Genfit  vs.  Y mAbs Therapeutics

 Performance 
       Timeline  
Genfit 

Risk-Adjusted Performance

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Weak
 
Strong
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.
Y mAbs Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Y mAbs Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Genfit and Y MAbs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Genfit and Y MAbs

The main advantage of trading using opposite Genfit and Y MAbs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, Y MAbs 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 Y MAbs will offset losses from the drop in Y MAbs' long position.
The idea behind Genfit and Y mAbs Therapeutics 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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