Correlation Between Inventiva and Silo Pharma

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

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

Diversification Opportunities for Inventiva and Silo Pharma

0.14

Correlation Coefficient

Inventiva  Silo Pharma

Average diversification

The 3 months correlation between Inventiva and Silo is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and Silo Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silo Pharma and Inventiva 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 Inventiva Sa are associated (or correlated) with Silo Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silo Pharma has no effect on the direction of Inventiva i.e., Inventiva and Silo Pharma go up and down completely randomly.

Pair Corralation between Inventiva and Silo Pharma

Considering the 90-day investment horizon Inventiva Sa is expected to under-perform the Silo Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Inventiva Sa is 2.75 times less risky than Silo Pharma. The stock trades about -0.41 of its potential returns per unit of risk. The Silo Pharma is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Silo Pharma on September 30, 2024 and sell it today you would lose (6.00) from holding Silo Pharma or give up 6.0% of portfolio value over 90 days.

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

Inventiva Sa  vs.  Silo Pharma

Inventiva Sa

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inventiva Sa are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Inventiva sustained solid returns over the last few months and may actually be approaching a breakup point.

Silo Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silo Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Inventiva and Silo Pharma

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

The idea behind Inventiva Sa and Silo Pharma 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.