Correlation Between Biofrontera Warrants and Addex Therapeutics
Can any of the company-specific risk be diversified away by investing in both Biofrontera Warrants 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 Biofrontera Warrants and Addex Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofrontera Warrants and Addex Therapeutics, you can compare the effects of market volatilities on Biofrontera Warrants 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 Biofrontera Warrants with a short position of Addex Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofrontera Warrants and Addex Therapeutics.
Diversification Opportunities for Biofrontera Warrants and Addex Therapeutics
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biofrontera and Addex is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera Warrants and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Biofrontera Warrants 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 Biofrontera Warrants 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 Biofrontera Warrants i.e., Biofrontera Warrants and Addex Therapeutics go up and down completely randomly.
Pair Corralation between Biofrontera Warrants and Addex Therapeutics
Assuming the 90 days horizon Biofrontera Warrants is expected to generate 5.46 times more return on investment than Addex Therapeutics. However, Biofrontera Warrants is 5.46 times more volatile than Addex Therapeutics. It trades about 0.12 of its potential returns per unit of risk. Addex Therapeutics is currently generating about -0.05 per unit of risk. If you would invest 19.00 in Biofrontera Warrants on September 1, 2024 and sell it today you would lose (6.00) from holding Biofrontera Warrants or give up 31.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Biofrontera Warrants vs. Addex Therapeutics
Performance |
| Timeline |
| Biofrontera Warrants |
| Addex Therapeutics |
Biofrontera Warrants and Addex Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofrontera Warrants and Addex Therapeutics
The main advantage of trading using opposite Biofrontera Warrants and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofrontera Warrants 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.| Biofrontera Warrants vs. Tff Pharmaceuticals | Biofrontera Warrants vs. Eliem Therapeutics | Biofrontera Warrants vs. Inhibrx | Biofrontera Warrants vs. Enliven Therapeutics |
| Addex Therapeutics vs. Innate Pharma | Addex Therapeutics vs. Aptorum Group Ltd | Addex Therapeutics vs. Dyadic International | Addex Therapeutics vs. Soligenix |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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