Correlation Between FIREWEED METALS and Genfit SA
Can any of the company-specific risk be diversified away by investing in both FIREWEED METALS and Genfit SA 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 FIREWEED METALS and Genfit SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIREWEED METALS P and Genfit SA, you can compare the effects of market volatilities on FIREWEED METALS and Genfit SA 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 FIREWEED METALS with a short position of Genfit SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIREWEED METALS and Genfit SA.
Diversification Opportunities for FIREWEED METALS and Genfit SA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FIREWEED and Genfit is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding FIREWEED METALS P and Genfit SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit SA and FIREWEED METALS 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 FIREWEED METALS P are associated (or correlated) with Genfit SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit SA has no effect on the direction of FIREWEED METALS i.e., FIREWEED METALS and Genfit SA go up and down completely randomly.
Pair Corralation between FIREWEED METALS and Genfit SA
Assuming the 90 days horizon FIREWEED METALS is expected to generate 1.72 times less return on investment than Genfit SA. But when comparing it to its historical volatility, FIREWEED METALS P is 2.06 times less risky than Genfit SA. It trades about 0.03 of its potential returns per unit of risk. Genfit SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 386.00 in Genfit SA on September 24, 2024 and sell it today you would lose (43.00) from holding Genfit SA or give up 11.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIREWEED METALS P vs. Genfit SA
Performance |
| Timeline |
| FIREWEED METALS P |
| Genfit SA |
FIREWEED METALS and Genfit SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIREWEED METALS and Genfit SA
The main advantage of trading using opposite FIREWEED METALS and Genfit SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIREWEED METALS position performs unexpectedly, Genfit SA 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 SA will offset losses from the drop in Genfit SA's long position.| FIREWEED METALS vs. Rio Tinto Group | FIREWEED METALS vs. Anglo American plc | FIREWEED METALS vs. Liontown Resources Limited | FIREWEED METALS vs. NEXA RESOURCES SA |
| Genfit SA vs. Uber Technologies | Genfit SA vs. WisdomTree Investments | Genfit SA vs. NetSol Technologies | Genfit SA vs. EIDESVIK OFFSHORE NK |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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