Correlation Between Genfit and CERo Therapeutics

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

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

Diversification Opportunities for Genfit and CERo Therapeutics

-0.4

Correlation Coefficient

Genfit  CERo Therapeutics

Very good diversification

The 3 months correlation between Genfit and CERo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and CERo Therapeutics Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics and Genfit 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 Genfit are associated (or correlated) with CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Genfit i.e., Genfit and CERo Therapeutics go up and down completely randomly.

Pair Corralation between Genfit and CERo Therapeutics

Given the investment horizon of 90 days Genfit is expected to generate 0.31 times more return on investment than CERo Therapeutics. However, Genfit is 3.19 times less risky than CERo Therapeutics. It trades about 0.02 of its potential returns per unit of risk. CERo Therapeutics Holdings, is currently generating about -0.04 per unit of risk. If you would invest  401.00  in Genfit on September 14, 2024 and sell it today you would lose (18.00) from holding Genfit or give up 4.49% of portfolio value over 90 days.

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

Genfit  vs.  CERo Therapeutics Holdings,

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.

CERo Therapeutics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CERo Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genfit and CERo Therapeutics

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

The idea behind Genfit and CERo Therapeutics Holdings, 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.