Correlation Between HUTCHMED DRC and Genfit
Can any of the company-specific risk be diversified away by investing in both HUTCHMED DRC and Genfit 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 HUTCHMED DRC and Genfit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUTCHMED DRC and Genfit, you can compare the effects of market volatilities on HUTCHMED DRC and Genfit 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 HUTCHMED DRC with a short position of Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHMED DRC and Genfit.
Diversification Opportunities for HUTCHMED DRC and Genfit
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HUTCHMED and Genfit is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED DRC and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and HUTCHMED DRC 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 HUTCHMED DRC are associated (or correlated) with Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of HUTCHMED DRC i.e., HUTCHMED DRC and Genfit go up and down completely randomly.
Pair Corralation between HUTCHMED DRC and Genfit
Considering the 90-day investment horizon HUTCHMED DRC is expected to generate 1.13 times more return on investment than Genfit. However, HUTCHMED DRC is 1.13 times more volatile than Genfit. It trades about 0.03 of its potential returns per unit of risk. Genfit is currently generating about 0.03 per unit of risk. If you would invest 1,371 in HUTCHMED DRC on August 24, 2024 and sell it today you would earn a total of 365.00 from holding HUTCHMED DRC or generate 26.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HUTCHMED DRC vs. Genfit
Performance |
| Timeline |
| HUTCHMED DRC |
| Genfit |
HUTCHMED DRC and Genfit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUTCHMED DRC and Genfit
The main advantage of trading using opposite HUTCHMED DRC and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUTCHMED DRC position performs unexpectedly, Genfit 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 Genfit will offset losses from the drop in Genfit's long position.| HUTCHMED DRC vs. ANI Pharmaceuticals | HUTCHMED DRC vs. Phibro Animal Health | HUTCHMED DRC vs. Prestige Brand Holdings | HUTCHMED DRC vs. Pacira BioSciences, |
| Genfit vs. Lyra Therapeutics | Genfit vs. Hookipa Pharma | Genfit vs. Cingulate Warrants | Genfit vs. SAB Biotherapeutics |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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