Correlation Between Energisme and Gensight Biologics

Can any of the company-specific risk be diversified away by investing in both Energisme and Gensight Biologics 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 Energisme and Gensight Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Energisme and Gensight Biologics SA, you can compare the effects of market volatilities on Energisme and Gensight Biologics 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 Energisme with a short position of Gensight Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisme and Gensight Biologics.

Diversification Opportunities for Energisme and Gensight Biologics

-0.01

Correlation Coefficient

Energisme  Gensight Biologics

Good diversification

The 3 months correlation between Energisme and Gensight is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Energisme and Gensight Biologics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gensight Biologics and Energisme 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 Energisme are associated (or correlated) with Gensight Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gensight Biologics has no effect on the direction of Energisme i.e., Energisme and Gensight Biologics go up and down completely randomly.

Pair Corralation between Energisme and Gensight Biologics

Assuming the 90 days trading horizon Energisme is expected to generate 0.95 times more return on investment than Gensight Biologics. However, Energisme is 1.05 times less risky than Gensight Biologics. It trades about 0.02 of its potential returns per unit of risk. Gensight Biologics SA is currently generating about -0.06 per unit of risk. If you would invest  0.56  in Energisme on September 28, 2024 and sell it today you would lose (0.01) from holding Energisme or give up 1.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Energisme  vs.  Gensight Biologics SA

Energisme

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Energisme are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Energisme is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Gensight Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gensight Biologics SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Energisme and Gensight Biologics

The main advantage of trading using opposite Energisme and Gensight Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisme position performs unexpectedly, Gensight Biologics 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 Gensight Biologics will offset losses from the drop in Gensight Biologics' long position.

The idea behind Energisme and Gensight Biologics SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.