Correlation Between Avenue Therapeutics and Addex Therapeutics

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

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

Diversification Opportunities for Avenue Therapeutics and Addex Therapeutics

0.24

Correlation Coefficient

Avenue Therapeutics  Addex Therapeutics

Modest diversification

The 3 months correlation between Avenue and Addex is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Avenue Therapeutics and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Avenue 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 Avenue Therapeutics are associated (or correlated) with Addex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addex Therapeutics has no effect on the direction of Avenue Therapeutics i.e., Avenue Therapeutics and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Avenue Therapeutics and Addex Therapeutics

Given the investment horizon of 90 days Avenue Therapeutics is expected to under-perform the Addex Therapeutics. In addition to that, Avenue Therapeutics is 1.41 times more volatile than Addex Therapeutics. It trades about -0.28 of its total potential returns per unit of risk. Addex Therapeutics is currently generating about 0.05 per unit of volatility. If you would invest  752.00  in Addex Therapeutics on December 27, 2024 and sell it today you would earn a total of  49.00  from holding Addex Therapeutics or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Avenue Therapeutics  vs.  Addex Therapeutics

Avenue Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avenue Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Addex Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Addex Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Addex Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Avenue Therapeutics and Addex Therapeutics

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

The idea behind Avenue Therapeutics and Addex Therapeutics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.