Correlation Between Genfit and Etablissements Maurel
Can any of the company-specific risk be diversified away by investing in both Genfit and Etablissements Maurel 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 Etablissements Maurel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and Etablissements Maurel et, you can compare the effects of market volatilities on Genfit and Etablissements Maurel 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 Etablissements Maurel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and Etablissements Maurel.
Diversification Opportunities for Genfit and Etablissements Maurel
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genfit and Etablissements is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Etablissements Maurel et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etablissements Maurel 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 Etablissements Maurel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etablissements Maurel has no effect on the direction of Genfit i.e., Genfit and Etablissements Maurel go up and down completely randomly.
Pair Corralation between Genfit and Etablissements Maurel
Assuming the 90 days trading horizon Genfit is expected to generate 1.79 times more return on investment than Etablissements Maurel. However, Genfit is 1.79 times more volatile than Etablissements Maurel et. It trades about -0.02 of its potential returns per unit of risk. Etablissements Maurel et is currently generating about -0.09 per unit of risk. If you would invest 472.00 in Genfit on August 29, 2024 and sell it today you would lose (78.00) from holding Genfit or give up 16.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genfit vs. Etablissements Maurel et
Performance |
| Timeline |
| Genfit |
| Etablissements Maurel |
Genfit and Etablissements Maurel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genfit and Etablissements Maurel
The main advantage of trading using opposite Genfit and Etablissements Maurel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, Etablissements Maurel 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 Etablissements Maurel will offset losses from the drop in Etablissements Maurel's long position.The idea behind Genfit and Etablissements Maurel et 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.| Etablissements Maurel vs. Vallourec | Etablissements Maurel vs. Eramet SA | Etablissements Maurel vs. Soitec SA | Etablissements Maurel vs. Nexans 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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