Correlation Between Genfit and Twist Bioscience

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

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

Diversification Opportunities for Genfit and Twist Bioscience

-0.43

Correlation Coefficient

Genfit  Twist Bioscience

Very good diversification

The 3 months correlation between Genfit and Twist is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Genfit and Twist Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twist Bioscience Corp 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 Twist Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twist Bioscience Corp has no effect on the direction of Genfit i.e., Genfit and Twist Bioscience go up and down completely randomly.

Pair Corralation between Genfit and Twist Bioscience

Given the investment horizon of 90 days Genfit is expected to under-perform the Twist Bioscience. But the stock apears to be less risky and, when comparing its historical volatility, Genfit is 1.85 times less risky than Twist Bioscience. The stock trades about -0.34 of its potential returns per unit of risk. The Twist Bioscience Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4,111  in Twist Bioscience Corp on September 21, 2024 and sell it today you would earn a total of  251.00  from holding Twist Bioscience Corp or generate 6.11% return on investment over 90 days.

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

Genfit  vs.  Twist Bioscience Corp

Genfit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genfit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Twist Bioscience Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Genfit and Twist Bioscience

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

The idea behind Genfit and Twist Bioscience Corp 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.