Correlation Between Replimune and Addex Therapeutics

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

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

Diversification Opportunities for Replimune and Addex Therapeutics

0.05

Correlation Coefficient

Replimune  Addex Therapeutics

Significant diversification

The 3 months correlation between Replimune and Addex is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Replimune Group and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Replimune 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 Replimune Group 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 Replimune i.e., Replimune and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Replimune and Addex Therapeutics

Given the investment horizon of 90 days Replimune Group is expected to under-perform the Addex Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Replimune Group is 1.51 times less risky than Addex Therapeutics. The stock trades about -0.05 of its potential returns per unit of risk. The Addex Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  824.00  in Addex Therapeutics on December 29, 2024 and sell it today you would lose (19.00) from holding Addex Therapeutics or give up 2.31% of portfolio value over 90 days.

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

Replimune Group  vs.  Addex Therapeutics

Replimune Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Replimune Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional 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 very weak basic indicators, Addex Therapeutics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Replimune and Addex Therapeutics

The main advantage of trading using opposite Replimune and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Replimune 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 Replimune Group 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.

Check out your portfolio center.

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.