Correlation Between Genfit and Western Digital
Can any of the company-specific risk be diversified away by investing in both Genfit and Western Digital 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 Western Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genfit and Western Digital, you can compare the effects of market volatilities on Genfit and Western Digital 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 Western Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and Western Digital.
Diversification Opportunities for Genfit and Western Digital
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genfit and Western is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Western Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Digital 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 Western Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Digital has no effect on the direction of Genfit i.e., Genfit and Western Digital go up and down completely randomly.
Pair Corralation between Genfit and Western Digital
Given the investment horizon of 90 days Genfit is expected to under-perform the Western Digital. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.1 times less risky than Western Digital. The stock trades about -0.14 of its potential returns per unit of risk. The Western Digital is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 6,512 in Western Digital on October 14, 2024 and sell it today you would lose (230.00) from holding Western Digital or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genfit vs. Western Digital
Performance |
| Timeline |
| Genfit |
| Western Digital |
Genfit and Western Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genfit and Western Digital
The main advantage of trading using opposite Genfit and Western Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genfit position performs unexpectedly, Western Digital 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 Western Digital will offset losses from the drop in Western Digital's long position.| Genfit vs. HCW Biologics | Genfit vs. Molecular Partners AG | Genfit vs. MediciNova | Genfit vs. Anebulo Pharmaceuticals |
| Western Digital vs. NetApp Inc | Western Digital vs. Logitech International SA | Western Digital vs. HP Inc | Western Digital vs. Dell Technologies |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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