Correlation Between Dow Jones and Genfit SA
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Genfit SA 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 Dow Jones and Genfit SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Genfit SA, you can compare the effects of market volatilities on Dow Jones and Genfit SA 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 Dow Jones with a short position of Genfit SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Genfit SA.
Diversification Opportunities for Dow Jones and Genfit SA
Excellent diversification
The 3 months correlation between Dow and Genfit is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Genfit SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit SA and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Genfit SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit SA has no effect on the direction of Dow Jones i.e., Dow Jones and Genfit SA go up and down completely randomly.
Pair Corralation between Dow Jones and Genfit SA
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.2 times less return on investment than Genfit SA. But when comparing it to its historical volatility, Dow Jones Industrial is 11.06 times less risky than Genfit SA. It trades about 0.07 of its potential returns per unit of risk. Genfit SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 395.00 in Genfit SA on September 20, 2024 and sell it today you would lose (48.00) from holding Genfit SA or give up 12.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.83% |
| Values | Daily Returns |
Dow Jones Industrial vs. Genfit SA
Performance |
| Timeline |
Dow Jones and Genfit SA Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Genfit SA
Pair trading matchups for Genfit SA
Pair Trading with Dow Jones and Genfit SA
The main advantage of trading using opposite Dow Jones and Genfit SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Genfit SA 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 SA will offset losses from the drop in Genfit SA's long position.| Dow Jones vs. Digi International | Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. United Microelectronics | Dow Jones vs. Weibo Corp |
| Genfit SA vs. BORR DRILLING NEW | Genfit SA vs. Brockhaus Capital Management | Genfit SA vs. FIREWEED METALS P | Genfit SA vs. Major Drilling Group |
Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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