Correlation Between Genfit and Biomerieux
Can any of the company-specific risk be diversified away by investing in both Genfit and Biomerieux 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 Biomerieux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and Biomerieux SA, you can compare the effects of market volatilities on Genfit and Biomerieux 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 Biomerieux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and Biomerieux.
Diversification Opportunities for Genfit and Biomerieux
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genfit and Biomerieux is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Biomerieux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerieux SA 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 Biomerieux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerieux SA has no effect on the direction of Genfit i.e., Genfit and Biomerieux go up and down completely randomly.
Pair Corralation between Genfit and Biomerieux
Assuming the 90 days trading horizon Genfit is expected to under-perform the Biomerieux. In addition to that, Genfit is 2.63 times more volatile than Biomerieux SA. It trades about -0.33 of its total potential returns per unit of risk. Biomerieux SA is currently generating about -0.21 per unit of volatility. If you would invest 10,660 in Biomerieux SA on August 30, 2024 and sell it today you would lose (680.00) from holding Biomerieux SA or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genfit vs. Biomerieux SA
Performance |
| Timeline |
| Genfit |
| Biomerieux SA |
Genfit and Biomerieux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genfit and Biomerieux
The main advantage of trading using opposite Genfit and Biomerieux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, Biomerieux 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 Biomerieux will offset losses from the drop in Biomerieux's long position.The idea behind Genfit and Biomerieux 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.| Biomerieux vs. Sartorius Stedim Biotech | Biomerieux vs. Eurofins Scientific SE | Biomerieux vs. Ipsen SA | Biomerieux vs. Edenred 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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