Correlation Between Addex Therapeutics and Erytech Pharma
Can any of the company-specific risk be diversified away by investing in both Addex Therapeutics and Erytech Pharma 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 Erytech Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addex Therapeutics and Erytech Pharma SA, you can compare the effects of market volatilities on Addex Therapeutics and Erytech Pharma 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 Erytech Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addex Therapeutics and Erytech Pharma.
Diversification Opportunities for Addex Therapeutics and Erytech Pharma
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addex and Erytech is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Addex Therapeutics and Erytech Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erytech Pharma SA 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 Erytech Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erytech Pharma SA has no effect on the direction of Addex Therapeutics i.e., Addex Therapeutics and Erytech Pharma go up and down completely randomly.
Pair Corralation between Addex Therapeutics and Erytech Pharma
Given the investment horizon of 90 days Addex Therapeutics is expected to generate 1.61 times more return on investment than Erytech Pharma. However, Addex Therapeutics is 1.61 times more volatile than Erytech Pharma SA. It trades about 0.02 of its potential returns per unit of risk. Erytech Pharma SA is currently generating about -0.03 per unit of risk. If you would invest 1,321 in Addex Therapeutics on September 2, 2024 and sell it today you would lose (450.00) from holding Addex Therapeutics or give up 34.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 3.49% |
| Values | Daily Returns |
Addex Therapeutics vs. Erytech Pharma SA
Performance |
| Timeline |
| Addex Therapeutics |
| Erytech Pharma SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Addex Therapeutics and Erytech Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addex Therapeutics and Erytech Pharma
The main advantage of trading using opposite Addex Therapeutics and Erytech Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addex Therapeutics position performs unexpectedly, Erytech Pharma 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 Erytech Pharma will offset losses from the drop in Erytech Pharma's long position.| Addex Therapeutics vs. Innate Pharma | Addex Therapeutics vs. Aptorum Group Ltd | Addex Therapeutics vs. Dyadic International | Addex Therapeutics vs. Soligenix |
| Erytech Pharma vs. Genfit | Erytech Pharma vs. Eliem Therapeutics | Erytech Pharma vs. HCW Biologics | Erytech Pharma vs. Aptorum Group Ltd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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