Correlation Between Genfit SA and Merck

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

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

Diversification Opportunities for Genfit SA and Merck

-0.45

Correlation Coefficient

Genfit SA  Merck

Very good diversification

The 3 months correlation between Genfit and Merck is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Genfit SA and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company 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 Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Company has no effect on the direction of Genfit SA i.e., Genfit SA and Merck go up and down completely randomly.

Pair Corralation between Genfit SA and Merck

Given the investment horizon of 90 days Genfit SA is expected to under-perform the Merck. In addition to that, Genfit SA is 1.72 times more volatile than Merck Company. It trades about -0.07 of its total potential returns per unit of risk. Merck Company is currently generating about -0.02 per unit of volatility. If you would invest  8,202  in Merck Company on May 5, 2025 and sell it today you would lose (273.00) from holding Merck Company or give up 3.33% of portfolio value over 90 days.

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

Genfit SA  vs.  Merck Company

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Merck Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Merck Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Merck is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Genfit SA and Merck

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

The idea behind Genfit SA and Merck Company 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.