Correlation Between Genfit SA and Abcellera Biologics

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

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

Diversification Opportunities for Genfit SA and Abcellera Biologics

0.72

Correlation Coefficient

Genfit SA  Abcellera Biologics

Poor diversification

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

Pair Corralation between Genfit SA and Abcellera Biologics

Given the investment horizon of 90 days Genfit SA is expected to generate 1.11 times more return on investment than Abcellera Biologics. However, Genfit SA is 1.11 times more volatile than Abcellera Biologics. It trades about 0.01 of its potential returns per unit of risk. Abcellera Biologics is currently generating about -0.06 per unit of risk. If you would invest  384.00  in Genfit SA on January 28, 2025 and sell it today you would lose (17.00) from holding Genfit SA or give up 4.43% of portfolio value over 90 days.

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

Genfit SA  vs.  Abcellera Biologics

Genfit SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genfit SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Genfit SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Abcellera Biologics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abcellera Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Genfit SA and Abcellera Biologics

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

The idea behind Genfit SA and Abcellera Biologics 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.