Correlation Between Genfit and Assembly Biosciences

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

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

Diversification Opportunities for Genfit and Assembly Biosciences

0.61

Correlation Coefficient

Genfit  Assembly Biosciences

Poor diversification

The 3 months correlation between Genfit and Assembly is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Assembly Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assembly Biosciences 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 Assembly Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assembly Biosciences has no effect on the direction of Genfit i.e., Genfit and Assembly Biosciences go up and down completely randomly.

Pair Corralation between Genfit and Assembly Biosciences

Given the investment horizon of 90 days Genfit is expected to generate 0.69 times more return on investment than Assembly Biosciences. However, Genfit is 1.44 times less risky than Assembly Biosciences. It trades about 0.02 of its potential returns per unit of risk. Assembly Biosciences is currently generating about 0.0 per unit of risk. If you would invest  357.00  in Genfit on March 28, 2024 and sell it today you would earn a total of  18.00  from holding Genfit or generate 5.04% return on investment over 90 days.

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

Genfit  vs.  Assembly Biosciences

Genfit

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Genfit are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, Genfit may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Assembly Biosciences

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Assembly Biosciences are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal primary indicators, Assembly Biosciences may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Genfit and Assembly Biosciences

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

The idea behind Genfit and Assembly Biosciences 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.