Correlation Between Carbon Revolution and Genfit

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

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

Diversification Opportunities for Carbon Revolution and Genfit

0.37

Correlation Coefficient

Carbon Revolution  Genfit

Weak diversification

The 3 months correlation between Carbon and Genfit is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Carbon Revolution Public and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Carbon Revolution 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 Carbon Revolution Public 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 Carbon Revolution i.e., Carbon Revolution and Genfit go up and down completely randomly.

Pair Corralation between Carbon Revolution and Genfit

Given the investment horizon of 90 days Carbon Revolution Public is expected to under-perform the Genfit. In addition to that, Carbon Revolution is 1.51 times more volatile than Genfit. It trades about -0.14 of its total potential returns per unit of risk. Genfit is currently generating about -0.01 per unit of volatility. If you would invest  414.00  in Genfit on September 16, 2024 and sell it today you would lose (32.00) from holding Genfit or give up 7.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Carbon Revolution Public  vs.  Genfit

Carbon Revolution Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carbon Revolution Public has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Genfit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genfit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Genfit is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Carbon Revolution and Genfit

The main advantage of trading using opposite Carbon Revolution and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carbon Revolution 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.

The idea behind Carbon Revolution Public and Genfit 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.