Correlation Between Addex Therapeutics and Basilea Pharmaceutica
Can any of the company-specific risk be diversified away by investing in both Addex Therapeutics and Basilea Pharmaceutica 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 Addex Therapeutics and Basilea Pharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addex Therapeutics and Basilea Pharmaceutica AG, you can compare the effects of market volatilities on Addex Therapeutics and Basilea Pharmaceutica 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 Addex Therapeutics with a short position of Basilea Pharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addex Therapeutics and Basilea Pharmaceutica.
Diversification Opportunities for Addex Therapeutics and Basilea Pharmaceutica
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Addex and Basilea is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Addex Therapeutics and Basilea Pharmaceutica AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basilea Pharmaceutica and Addex 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 Addex Therapeutics are associated (or correlated) with Basilea Pharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basilea Pharmaceutica has no effect on the direction of Addex Therapeutics i.e., Addex Therapeutics and Basilea Pharmaceutica go up and down completely randomly.
Pair Corralation between Addex Therapeutics and Basilea Pharmaceutica
Assuming the 90 days trading horizon Addex Therapeutics is expected to generate 4.21 times more return on investment than Basilea Pharmaceutica. However, Addex Therapeutics is 4.21 times more volatile than Basilea Pharmaceutica AG. It trades about -0.04 of its potential returns per unit of risk. Basilea Pharmaceutica AG is currently generating about -0.26 per unit of risk. If you would invest 6.90 in Addex Therapeutics on August 28, 2024 and sell it today you would lose (0.90) from holding Addex Therapeutics or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addex Therapeutics vs. Basilea Pharmaceutica AG
Performance |
| Timeline |
| Addex Therapeutics |
| Basilea Pharmaceutica |
Addex Therapeutics and Basilea Pharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addex Therapeutics and Basilea Pharmaceutica
The main advantage of trading using opposite Addex Therapeutics and Basilea Pharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addex Therapeutics position performs unexpectedly, Basilea Pharmaceutica 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 Basilea Pharmaceutica will offset losses from the drop in Basilea Pharmaceutica's long position.| Addex Therapeutics vs. Santhera Pharmaceuticals Holding | Addex Therapeutics vs. Newron Pharmaceuticals SpA | Addex Therapeutics vs. Basilea Pharmaceutica AG | Addex Therapeutics vs. Evolva Holding SA |
| Basilea Pharmaceutica vs. Santhera Pharmaceuticals Holding | Basilea Pharmaceutica vs. Idorsia | Basilea Pharmaceutica vs. Molecular Partners AG | Basilea Pharmaceutica vs. Evolva Holding SA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |