Correlation Between Genfit and Parrot
Can any of the company-specific risk be diversified away by investing in both Genfit and Parrot 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 Parrot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and Parrot, you can compare the effects of market volatilities on Genfit and Parrot 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 Parrot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and Parrot.
Diversification Opportunities for Genfit and Parrot
Excellent diversification
The 3 months correlation between Genfit and Parrot is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Parrot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parrot 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 Parrot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parrot has no effect on the direction of Genfit i.e., Genfit and Parrot go up and down completely randomly.
Pair Corralation between Genfit and Parrot
Assuming the 90 days trading horizon Genfit is expected to under-perform the Parrot. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.26 times less risky than Parrot. The stock trades about -0.29 of its potential returns per unit of risk. The Parrot is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 195.00 in Parrot on August 27, 2024 and sell it today you would earn a total of 51.00 from holding Parrot or generate 26.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genfit vs. Parrot
Performance |
| Timeline |
| Genfit |
| Parrot |
Genfit and Parrot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genfit and Parrot
The main advantage of trading using opposite Genfit and Parrot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, Parrot 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 Parrot will offset losses from the drop in Parrot's long position.The idea behind Genfit and Parrot 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.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |