Correlation Between Gensight Biologics and LNA Sante

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

Diversification Opportunities for Gensight Biologics and LNA Sante

-0.37

Correlation Coefficient

Gensight Biologics  LNA Sante

Very good diversification

The 3 months correlation between Gensight and LNA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gensight Biologics SA and LNA Sante SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LNA Sante 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 LNA Sante. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LNA Sante SA has no effect on the direction of Gensight Biologics i.e., Gensight Biologics and LNA Sante go up and down completely randomly.

Pair Corralation between Gensight Biologics and LNA Sante

Assuming the 90 days trading horizon Gensight Biologics SA is expected to under-perform the LNA Sante. In addition to that, Gensight Biologics is 1.7 times more volatile than LNA Sante SA. It trades about -0.13 of its total potential returns per unit of risk. LNA Sante SA is currently generating about 0.11 per unit of volatility. If you would invest  2,375  in LNA Sante SA on December 4, 2024 and sell it today you would earn a total of  320.00  from holding LNA Sante SA or generate 13.47% return on investment over 90 days.

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

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

LNA Sante SA

Risk-Adjusted Performance

OK

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

Pair Trading with Gensight Biologics and LNA Sante

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

The idea behind Gensight Biologics SA and LNA Sante 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.