Correlation Between Genfit and Diageo PLC
Can any of the company-specific risk be diversified away by investing in both Genfit and Diageo PLC 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 Diageo PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and Diageo PLC ADR, you can compare the effects of market volatilities on Genfit and Diageo PLC 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 Diageo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and Diageo PLC.
Diversification Opportunities for Genfit and Diageo PLC
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genfit and Diageo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Diageo PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diageo PLC ADR 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 Diageo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diageo PLC ADR has no effect on the direction of Genfit i.e., Genfit and Diageo PLC go up and down completely randomly.
Pair Corralation between Genfit and Diageo PLC
Given the investment horizon of 90 days Genfit is expected to under-perform the Diageo PLC. In addition to that, Genfit is 2.29 times more volatile than Diageo PLC ADR. It trades about -0.43 of its total potential returns per unit of risk. Diageo PLC ADR is currently generating about 0.27 per unit of volatility. If you would invest 11,968 in Diageo PLC ADR on September 13, 2024 and sell it today you would earn a total of 993.00 from holding Diageo PLC ADR or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genfit vs. Diageo PLC ADR
Performance |
| Timeline |
| Genfit |
| Diageo PLC ADR |
Genfit and Diageo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genfit and Diageo PLC
The main advantage of trading using opposite Genfit and Diageo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, Diageo PLC 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 Diageo PLC will offset losses from the drop in Diageo PLC's long position.| Genfit vs. Puma Biotechnology | Genfit vs. Iovance Biotherapeutics | Genfit vs. Sarepta Therapeutics | Genfit vs. Day One Biopharmaceuticals |
| Diageo PLC vs. Brown Forman | Diageo PLC vs. MGP Ingredients | Diageo PLC vs. Duckhorn Portfolio | Diageo PLC vs. Brown Forman |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |