Correlation Between Addex Therapeutics and Plazza AG

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

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

Diversification Opportunities for Addex Therapeutics and Plazza AG

-0.41

Correlation Coefficient

Addex Therapeutics  Plazza AG

Very good diversification

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

Pair Corralation between Addex Therapeutics and Plazza AG

Assuming the 90 days trading horizon Addex Therapeutics is expected to generate 18.58 times more return on investment than Plazza AG. However, Addex Therapeutics is 18.58 times more volatile than Plazza AG. It trades about 0.11 of its potential returns per unit of risk. Plazza AG is currently generating about 0.13 per unit of risk. If you would invest  5.78  in Addex Therapeutics on October 24, 2024 and sell it today you would earn a total of  0.42  from holding Addex Therapeutics or generate 7.27% return on investment over 90 days.

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

Addex Therapeutics  vs.  Plazza AG

Addex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Addex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Plazza AG

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Plazza AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Plazza AG is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Addex Therapeutics and Plazza AG

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

The idea behind Addex Therapeutics and Plazza AG 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.