Correlation Between Genfit and OSE Pharma
Can any of the company-specific risk be diversified away by investing in both Genfit and OSE Pharma 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 OSE Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and OSE Pharma SA, you can compare the effects of market volatilities on Genfit and OSE Pharma 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 OSE Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and OSE Pharma.
Diversification Opportunities for Genfit and OSE Pharma
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genfit and OSE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and OSE Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSE Pharma 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 OSE Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSE Pharma SA has no effect on the direction of Genfit i.e., Genfit and OSE Pharma go up and down completely randomly.
Pair Corralation between Genfit and OSE Pharma
Assuming the 90 days trading horizon Genfit is expected to under-perform the OSE Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.23 times less risky than OSE Pharma. The stock trades about -0.04 of its potential returns per unit of risk. The OSE Pharma SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 799.00 in OSE Pharma SA on September 1, 2024 and sell it today you would earn a total of 84.00 from holding OSE Pharma SA or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genfit vs. OSE Pharma SA
Performance |
| Timeline |
| Genfit |
| OSE Pharma SA |
Genfit and OSE Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genfit and OSE Pharma
The main advantage of trading using opposite Genfit and OSE Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, OSE Pharma 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 OSE Pharma will offset losses from the drop in OSE Pharma's long position.The idea behind Genfit and OSE Pharma 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.| OSE Pharma vs. Innate Pharma | OSE Pharma vs. Quantum Genomics SA | OSE Pharma vs. Valneva SE | OSE Pharma vs. Poxel 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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