Correlation Between Relief Therapeutics and Addex Therapeutics

Can any of the company-specific risk be diversified away by investing in both Relief 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 Relief 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 Relief Therapeutics Holding and Addex Therapeutics, you can compare the effects of market volatilities on Relief 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 Relief Therapeutics with a short position of Addex Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relief Therapeutics and Addex Therapeutics.

Diversification Opportunities for Relief Therapeutics and Addex Therapeutics

0.47

Correlation Coefficient

Relief Therapeutics  Addex Therapeutics

Very weak diversification

The 3 months correlation between Relief and Addex is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Relief Therapeutics Holding and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Relief 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 Relief Therapeutics Holding 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 Relief Therapeutics i.e., Relief Therapeutics and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Relief Therapeutics and Addex Therapeutics

Assuming the 90 days trading horizon Relief Therapeutics Holding is expected to generate 0.83 times more return on investment than Addex Therapeutics. However, Relief Therapeutics Holding is 1.2 times less risky than Addex Therapeutics. It trades about 0.2 of its potential returns per unit of risk. Addex Therapeutics is currently generating about 0.15 per unit of risk. If you would invest  378.00  in Relief Therapeutics Holding on October 7, 2024 and sell it today you would earn a total of  62.00  from holding Relief Therapeutics Holding or generate 16.4% return on investment over 90 days.

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

Relief Therapeutics Holding  vs.  Addex Therapeutics

Relief Therapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Relief Therapeutics Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Relief Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

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 fairly stable basic indicators, Addex Therapeutics 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 Relief Therapeutics and Addex Therapeutics

The main advantage of trading using opposite Relief Therapeutics and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relief 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 Relief Therapeutics Holding 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 Global Correlations module to find global opportunities by holding instruments from different markets.