Correlation Between Gensight Biologics and Implanet

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

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

Diversification Opportunities for Gensight Biologics and Implanet

0.45

Correlation Coefficient

Gensight Biologics  Implanet

Very weak diversification

The 3 months correlation between Gensight and Implanet is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gensight Biologics SA and Implanet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implanet SA and Gensight Biologics 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 Gensight Biologics SA are associated (or correlated) with Implanet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implanet SA has no effect on the direction of Gensight Biologics i.e., Gensight Biologics and Implanet go up and down completely randomly.

Pair Corralation between Gensight Biologics and Implanet

Assuming the 90 days trading horizon Gensight Biologics SA is expected to under-perform the Implanet. But the stock apears to be less risky and, when comparing its historical volatility, Gensight Biologics SA is 1.1 times less risky than Implanet. The stock trades about -0.03 of its potential returns per unit of risk. The Implanet SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Implanet SA on December 30, 2024 and sell it today you would lose (1.00) from holding Implanet SA or give up 9.09% of portfolio value over 90 days.

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

Gensight Biologics SA  vs.  Implanet SA

Gensight Biologics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gensight Biologics SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Implanet SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Implanet SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Implanet 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 Gensight Biologics and Implanet

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

The idea behind Gensight Biologics SA and Implanet SA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.