Correlation Between Addex Therapeutics and Cyclerion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Addex Therapeutics and Cyclerion 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 Addex Therapeutics and Cyclerion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addex Therapeutics and Cyclerion Therapeutics, you can compare the effects of market volatilities on Addex Therapeutics and Cyclerion 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 Addex Therapeutics with a short position of Cyclerion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addex Therapeutics and Cyclerion Therapeutics.
Diversification Opportunities for Addex Therapeutics and Cyclerion Therapeutics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Addex and Cyclerion is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Addex Therapeutics and Cyclerion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclerion Therapeutics 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 Cyclerion Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclerion Therapeutics has no effect on the direction of Addex Therapeutics i.e., Addex Therapeutics and Cyclerion Therapeutics go up and down completely randomly.
Pair Corralation between Addex Therapeutics and Cyclerion Therapeutics
Given the investment horizon of 90 days Addex Therapeutics is expected to generate 0.44 times more return on investment than Cyclerion Therapeutics. However, Addex Therapeutics is 2.25 times less risky than Cyclerion Therapeutics. It trades about -0.12 of its potential returns per unit of risk. Cyclerion Therapeutics is currently generating about -0.18 per unit of risk. If you would invest 1,101 in Addex Therapeutics on August 29, 2024 and sell it today you would lose (223.00) from holding Addex Therapeutics or give up 20.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addex Therapeutics vs. Cyclerion Therapeutics
Performance |
| Timeline |
| Addex Therapeutics |
| Cyclerion Therapeutics |
Addex Therapeutics and Cyclerion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addex Therapeutics and Cyclerion Therapeutics
The main advantage of trading using opposite Addex Therapeutics and Cyclerion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addex Therapeutics position performs unexpectedly, Cyclerion 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 Cyclerion Therapeutics will offset losses from the drop in Cyclerion Therapeutics' long position.| Addex Therapeutics vs. Innate Pharma | Addex Therapeutics vs. Aptorum Group Ltd | Addex Therapeutics vs. Dyadic International | Addex Therapeutics vs. Soligenix |
| Cyclerion Therapeutics vs. Eliem Therapeutics | Cyclerion Therapeutics vs. Scpharmaceuticals | Cyclerion Therapeutics vs. Milestone Pharmaceuticals | Cyclerion Therapeutics vs. Seres Therapeutics |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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