Correlation Between Puma Biotechnology and Genfit
Can any of the company-specific risk be diversified away by investing in both Puma Biotechnology 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 Puma Biotechnology and Genfit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Biotechnology and Genfit, you can compare the effects of market volatilities on Puma Biotechnology 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 Puma Biotechnology with a short position of Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Biotechnology and Genfit.
Diversification Opportunities for Puma Biotechnology and Genfit
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Puma and Genfit is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Puma Biotechnology and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Puma Biotechnology 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 Puma Biotechnology 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 Puma Biotechnology i.e., Puma Biotechnology and Genfit go up and down completely randomly.
Pair Corralation between Puma Biotechnology and Genfit
Given the investment horizon of 90 days Puma Biotechnology is expected to generate 1.91 times more return on investment than Genfit. However, Puma Biotechnology is 1.91 times more volatile than Genfit. It trades about 0.02 of its potential returns per unit of risk. Genfit is currently generating about -0.44 per unit of risk. If you would invest 297.00 in Puma Biotechnology on September 14, 2024 and sell it today you would lose (5.00) from holding Puma Biotechnology or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puma Biotechnology vs. Genfit
Performance |
| Timeline |
| Puma Biotechnology |
| Genfit |
Puma Biotechnology and Genfit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Biotechnology and Genfit
The main advantage of trading using opposite Puma Biotechnology and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Biotechnology 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.| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
| Genfit vs. Puma Biotechnology | Genfit vs. Iovance Biotherapeutics | Genfit vs. Sarepta Therapeutics | Genfit vs. Day One Biopharmaceuticals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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