Correlation Between Gensight Biologics and Spineguard

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

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

Diversification Opportunities for Gensight Biologics and Spineguard

-0.11

Correlation Coefficient

Gensight Biologics  Spineguard

Good diversification

The 3 months correlation between Gensight and Spineguard is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Gensight Biologics SA and Spineguard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spineguard and Gensight Biologics 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 Gensight Biologics SA are associated (or correlated) with Spineguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spineguard has no effect on the direction of Gensight Biologics i.e., Gensight Biologics and Spineguard go up and down completely randomly.

Pair Corralation between Gensight Biologics and Spineguard

Assuming the 90 days trading horizon Gensight Biologics SA is expected to generate 1.04 times more return on investment than Spineguard. However, Gensight Biologics is 1.04 times more volatile than Spineguard. It trades about 0.05 of its potential returns per unit of risk. Spineguard is currently generating about 0.02 per unit of risk. If you would invest  31.00  in Gensight Biologics SA on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Gensight Biologics SA or generate 3.23% return on investment over 90 days.

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

Gensight Biologics SA  vs.  Spineguard

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Spineguard

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Spineguard are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Spineguard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gensight Biologics and Spineguard

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

The idea behind Gensight Biologics SA and Spineguard 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.