Correlation Between Inventiva and MeiraGTx Holdings

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Can any of the company-specific risk be diversified away by investing in both Inventiva and MeiraGTx Holdings 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 Inventiva and MeiraGTx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventiva Sa and MeiraGTx Holdings PLC, you can compare the effects of market volatilities on Inventiva and MeiraGTx Holdings 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 Inventiva with a short position of MeiraGTx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventiva and MeiraGTx Holdings.

Diversification Opportunities for Inventiva and MeiraGTx Holdings

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Inventiva and MeiraGTx is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and MeiraGTx Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeiraGTx Holdings PLC and Inventiva 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 Inventiva Sa are associated (or correlated) with MeiraGTx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeiraGTx Holdings PLC has no effect on the direction of Inventiva i.e., Inventiva and MeiraGTx Holdings go up and down completely randomly.

Pair Corralation between Inventiva and MeiraGTx Holdings

Considering the 90-day investment horizon Inventiva Sa is expected to generate 0.64 times more return on investment than MeiraGTx Holdings. However, Inventiva Sa is 1.56 times less risky than MeiraGTx Holdings. It trades about -0.03 of its potential returns per unit of risk. MeiraGTx Holdings PLC is currently generating about -0.02 per unit of risk. If you would invest  220.00  in Inventiva Sa on October 25, 2024 and sell it today you would lose (3.00) from holding Inventiva Sa or give up 1.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Inventiva Sa  vs.  MeiraGTx Holdings PLC

 Performance 
       Timeline  
Inventiva Sa 

Risk-Adjusted Performance

0 of 100

 
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Strong
Very Weak
Over the last 90 days Inventiva Sa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
MeiraGTx Holdings PLC 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in MeiraGTx Holdings PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MeiraGTx Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Inventiva and MeiraGTx Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Inventiva and MeiraGTx Holdings

The main advantage of trading using opposite Inventiva and MeiraGTx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventiva position performs unexpectedly, MeiraGTx Holdings 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 MeiraGTx Holdings will offset losses from the drop in MeiraGTx Holdings' long position.
The idea behind Inventiva Sa and MeiraGTx Holdings PLC 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.
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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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