Correlation Between SPDR Dow and Addex Therapeutics

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

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

Diversification Opportunities for SPDR Dow and Addex Therapeutics

0.0

Correlation Coefficient

SPDR Dow  Addex Therapeutics

Pay attention - limited upside

The 3 months correlation between SPDR and Addex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and SPDR Dow 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 SPDR Dow Jones 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 SPDR Dow i.e., SPDR Dow and Addex Therapeutics go up and down completely randomly.

Pair Corralation between SPDR Dow and Addex Therapeutics

If you would invest  5.78  in Addex Therapeutics on December 22, 2024 and sell it today you would lose (0.08) from holding Addex Therapeutics or give up 1.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SPDR Dow Jones  vs.  Addex Therapeutics

SPDR Dow Jones

Risk-Adjusted Performance

Weak

Over the last 90 days SPDR Dow Jones has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SPDR Dow is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Addex Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Addex Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Addex Therapeutics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SPDR Dow and Addex Therapeutics

The main advantage of trading using opposite SPDR Dow and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow 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 SPDR Dow Jones 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.