Correlation Between Gensight Biologics and OSE Pharma

Can any of the company-specific risk be diversified away by investing in both Gensight Biologics and OSE 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 Gensight Biologics and OSE Pharma 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 OSE Pharma SA, you can compare the effects of market volatilities on Gensight Biologics and OSE 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 Gensight Biologics with a short position of OSE Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gensight Biologics and OSE Pharma.

Diversification Opportunities for Gensight Biologics and OSE Pharma

-0.41

Correlation Coefficient

Gensight Biologics  OSE Pharma

Very good diversification

The 3 months correlation between Gensight and OSE is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gensight Biologics SA and OSE Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSE Pharma SA 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 OSE Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSE Pharma SA has no effect on the direction of Gensight Biologics i.e., Gensight Biologics and OSE Pharma go up and down completely randomly.

Pair Corralation between Gensight Biologics and OSE Pharma

Assuming the 90 days trading horizon Gensight Biologics SA is expected to under-perform the OSE Pharma. In addition to that, Gensight Biologics is 1.24 times more volatile than OSE Pharma SA. It trades about -0.04 of its total potential returns per unit of risk. OSE Pharma SA is currently generating about 0.09 per unit of volatility. If you would invest  658.00  in OSE Pharma SA on September 15, 2024 and sell it today you would earn a total of  122.00  from holding OSE Pharma SA or generate 18.54% return on investment over 90 days.

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

Gensight Biologics SA  vs.  OSE Pharma SA

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.

OSE Pharma SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OSE Pharma SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, OSE Pharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gensight Biologics and OSE Pharma

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

The idea behind Gensight Biologics SA and OSE Pharma SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.