Correlation Between Inventiva and Renalytix

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

By analyzing existing cross correlation between Inventiva Sa and Renalytix AI, you can compare the effects of market volatilities on Inventiva and Renalytix 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 Inventiva with a short position of Renalytix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventiva and Renalytix.

Diversification Opportunities for Inventiva and Renalytix

0.0

Correlation Coefficient

Inventiva  Renalytix

Pay attention - limited upside

The 3 months correlation between Inventiva and Renalytix is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and Renalytix AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renalytix AI and Inventiva 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 Inventiva Sa are associated (or correlated) with Renalytix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renalytix AI has no effect on the direction of Inventiva i.e., Inventiva and Renalytix go up and down completely randomly.

Pair Corralation between Inventiva and Renalytix

If you would invest  214.00  in Inventiva Sa on December 2, 2024 and sell it today you would earn a total of  103.00  from holding Inventiva Sa or generate 48.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Inventiva Sa  vs.  Renalytix AI

Inventiva Sa

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inventiva Sa are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Inventiva sustained solid returns over the last few months and may actually be approaching a breakup point.

Renalytix AI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Renalytix AI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Renalytix is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inventiva and Renalytix

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

The idea behind Inventiva Sa and Renalytix AI 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.