Correlation Between Satsuma Pharmaceuticals and Genfit

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

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

Diversification Opportunities for Satsuma Pharmaceuticals and Genfit

-0.7

Correlation Coefficient

Satsuma Pharmaceuticals  Genfit

Excellent diversification

The 3 months correlation between Satsuma and Genfit is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Satsuma Pharmaceuticals and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Satsuma Pharmaceuticals 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 Satsuma Pharmaceuticals 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 Satsuma Pharmaceuticals i.e., Satsuma Pharmaceuticals and Genfit go up and down completely randomly.

Pair Corralation between Satsuma Pharmaceuticals and Genfit

If you would invest  375.00  in Genfit on September 24, 2024 and sell it today you would earn a total of  5.00  from holding Genfit or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.79%
Values	Daily Returns

Satsuma Pharmaceuticals  vs.  Genfit

Satsuma Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Satsuma Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Satsuma Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the 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. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Satsuma Pharmaceuticals and Genfit

The main advantage of trading using opposite Satsuma Pharmaceuticals and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satsuma Pharmaceuticals 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 Satsuma Pharmaceuticals 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.