Correlation Between Investment and Genfit

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

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

Diversification Opportunities for Investment and Genfit

0.0

Correlation Coefficient

Investment  Genfit

Pay attention - limited upside

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

Pair Corralation between Investment and Genfit

Assuming the 90 days horizon Investment AB Latour is expected to generate 0.43 times more return on investment than Genfit. However, Investment AB Latour is 2.31 times less risky than Genfit. It trades about 0.08 of its potential returns per unit of risk. Genfit is currently generating about 0.03 per unit of risk. If you would invest  1,765  in Investment AB Latour on October 9, 2024 and sell it today you would earn a total of  691.00  from holding Investment AB Latour or generate 39.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Investment AB Latour  vs.  Genfit

Investment AB Latour

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment AB Latour has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Investment and Genfit

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

The idea behind Investment AB Latour and Genfit 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.