Correlation Between Genfit and TronicS Microsystems
Can any of the company-specific risk be diversified away by investing in both Genfit and TronicS Microsystems 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 Genfit and TronicS Microsystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and TronicS Microsystems SA, you can compare the effects of market volatilities on Genfit and TronicS Microsystems 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 Genfit with a short position of TronicS Microsystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and TronicS Microsystems.
Diversification Opportunities for Genfit and TronicS Microsystems
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Genfit and TronicS is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and TronicS Microsystems SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TronicS Microsystems and Genfit 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 Genfit are associated (or correlated) with TronicS Microsystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TronicS Microsystems has no effect on the direction of Genfit i.e., Genfit and TronicS Microsystems go up and down completely randomly.
Pair Corralation between Genfit and TronicS Microsystems
Assuming the 90 days trading horizon Genfit is expected to generate 5.34 times less return on investment than TronicS Microsystems. But when comparing it to its historical volatility, Genfit is 2.08 times less risky than TronicS Microsystems. It trades about 0.01 of its potential returns per unit of risk. TronicS Microsystems SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 410.00 in TronicS Microsystems SA on August 27, 2024 and sell it today you would lose (10.00) from holding TronicS Microsystems SA or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.75% |
| Values | Daily Returns |
Genfit vs. TronicS Microsystems SA
Performance |
| Timeline |
| Genfit |
| TronicS Microsystems |
Genfit and TronicS Microsystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genfit and TronicS Microsystems
The main advantage of trading using opposite Genfit and TronicS Microsystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, TronicS Microsystems 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 TronicS Microsystems will offset losses from the drop in TronicS Microsystems' long position.The idea behind Genfit and TronicS Microsystems 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.| TronicS Microsystems vs. Sartorius Stedim Biotech | TronicS Microsystems vs. Lectra SA | TronicS Microsystems vs. Teleperformance SE | TronicS Microsystems vs. Trigano SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |