Correlation Between Addex Therapeutics and Biocardia
Can any of the company-specific risk be diversified away by investing in both Addex Therapeutics and Biocardia 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 Biocardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addex Therapeutics and Biocardia, you can compare the effects of market volatilities on Addex Therapeutics and Biocardia 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 Biocardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addex Therapeutics and Biocardia.
Diversification Opportunities for Addex Therapeutics and Biocardia
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addex and Biocardia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Addex Therapeutics and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia 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 Biocardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biocardia has no effect on the direction of Addex Therapeutics i.e., Addex Therapeutics and Biocardia go up and down completely randomly.
Pair Corralation between Addex Therapeutics and Biocardia
Given the investment horizon of 90 days Addex Therapeutics is expected to generate 1.35 times more return on investment than Biocardia. However, Addex Therapeutics is 1.35 times more volatile than Biocardia. It trades about 0.07 of its potential returns per unit of risk. Biocardia is currently generating about -0.08 per unit of risk. If you would invest 853.00 in Addex Therapeutics on November 28, 2024 and sell it today you would earn a total of 47.00 from holding Addex Therapeutics or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addex Therapeutics vs. Biocardia
Performance |
| Timeline |
| Addex Therapeutics |
| Biocardia |
Addex Therapeutics and Biocardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addex Therapeutics and Biocardia
The main advantage of trading using opposite Addex Therapeutics and Biocardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addex Therapeutics position performs unexpectedly, Biocardia 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 Biocardia will offset losses from the drop in Biocardia's long position.| Addex Therapeutics vs. Innate Pharma | Addex Therapeutics vs. Aptorum Group Ltd | Addex Therapeutics vs. Dyadic International | Addex Therapeutics vs. Soligenix |
| Biocardia vs. Aerovate Therapeutics | Biocardia vs. Adagene | Biocardia vs. Acrivon Therapeutics, Common | Biocardia vs. Rezolute |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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