Correlation Between Gensight Biologics and Genfit

Can any of the company-specific risk be diversified away by investing in both Gensight Biologics 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 Gensight Biologics and Genfit 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 Genfit, you can compare the effects of market volatilities on Gensight Biologics 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 Gensight Biologics with a short position of Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gensight Biologics and Genfit.

Diversification Opportunities for Gensight Biologics and Genfit

0.11

Correlation Coefficient

Gensight Biologics  Genfit

Average diversification

The 3 months correlation between Gensight and Genfit is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Gensight Biologics SA and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 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 Gensight Biologics i.e., Gensight Biologics and Genfit go up and down completely randomly.

Pair Corralation between Gensight Biologics and Genfit

Assuming the 90 days trading horizon Gensight Biologics SA is expected to under-perform the Genfit. In addition to that, Gensight Biologics is 1.35 times more volatile than Genfit. It trades about -0.01 of its total potential returns per unit of risk. Genfit is currently generating about 0.01 per unit of volatility. If you would invest  371.00  in Genfit on September 13, 2024 and sell it today you would lose (15.00) from holding Genfit or give up 4.04% of portfolio value over 90 days.

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

Gensight Biologics SA  vs.  Genfit

Gensight Biologics

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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. Despite somewhat strong basic indicators, Genfit is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gensight Biologics and Genfit

The main advantage of trading using opposite Gensight Biologics and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gensight Biologics 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 Gensight Biologics SA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.