Correlation Between Genfit and InflaRx NV

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

By analyzing existing cross correlation between Genfit and InflaRx NV, you can compare the effects of market volatilities on Genfit and InflaRx NV 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 InflaRx NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genfit and InflaRx NV.

Diversification Opportunities for Genfit and InflaRx NV

-0.72

Correlation Coefficient

Genfit  InflaRx NV

Pay attention - limited upside

The 3 months correlation between Genfit and InflaRx is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and InflaRx NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InflaRx NV 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 InflaRx NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InflaRx NV has no effect on the direction of Genfit i.e., Genfit and InflaRx NV go up and down completely randomly.

Pair Corralation between Genfit and InflaRx NV

Given the investment horizon of 90 days Genfit is expected to under-perform the InflaRx NV. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.06 times less risky than InflaRx NV. The stock trades about -0.01 of its potential returns per unit of risk. The InflaRx NV is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  145.00  in InflaRx NV on September 16, 2024 and sell it today you would earn a total of  91.00  from holding InflaRx NV or generate 62.76% return on investment over 90 days.

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

Genfit  vs.  InflaRx NV

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.

InflaRx NV

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in InflaRx NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, InflaRx NV showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genfit and InflaRx NV

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

The idea behind Genfit and InflaRx NV 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 CEOs Directory module to screen CEOs from public companies around the world.