Correlation Between Biophytis and Adocia

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

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

Diversification Opportunities for Biophytis and Adocia

-0.08

Correlation Coefficient

Biophytis  Adocia

Good diversification

The 3 months correlation between Biophytis and Adocia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Biophytis SA and Adocia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adocia and Biophytis 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 Biophytis SA are associated (or correlated) with Adocia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adocia has no effect on the direction of Biophytis i.e., Biophytis and Adocia go up and down completely randomly.

Pair Corralation between Biophytis and Adocia

Assuming the 90 days trading horizon Biophytis SA is expected to generate 1.58 times more return on investment than Adocia. However, Biophytis is 1.58 times more volatile than Adocia. It trades about 0.04 of its potential returns per unit of risk. Adocia is currently generating about -0.1 per unit of risk. If you would invest  30.00  in Biophytis SA on December 2, 2024 and sell it today you would earn a total of  1.00  from holding Biophytis SA or generate 3.33% return on investment over 90 days.

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

Biophytis SA  vs.  Adocia

Biophytis SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Biophytis SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Biophytis reported solid returns over the last few months and may actually be approaching a breakup point.

Adocia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adocia 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 basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Biophytis and Adocia

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

The idea behind Biophytis SA and Adocia 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.