Correlation Between Erytech Pharma and Addex Therapeutics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Erytech Pharma 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 Erytech Pharma and Addex Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erytech Pharma SA and Addex Therapeutics, you can compare the effects of market volatilities on Erytech Pharma 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 Erytech Pharma with a short position of Addex Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erytech Pharma and Addex Therapeutics.

Diversification Opportunities for Erytech Pharma and Addex Therapeutics

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Erytech and Addex is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Erytech Pharma SA and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Erytech Pharma 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 Erytech Pharma SA 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 Erytech Pharma i.e., Erytech Pharma and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Erytech Pharma and Addex Therapeutics

Given the investment horizon of 90 days Erytech Pharma SA is expected to under-perform the Addex Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Erytech Pharma SA is 1.61 times less risky than Addex Therapeutics. The stock trades about -0.03 of its potential returns per unit of risk. The Addex Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. 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 Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy3.49%
ValuesDaily Returns

Erytech Pharma SA  vs.  Addex Therapeutics

 Performance 
       Timeline  
Erytech Pharma SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Erytech Pharma SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Erytech Pharma is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.
Addex Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Addex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Erytech Pharma and Addex Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Erytech Pharma and Addex Therapeutics

The main advantage of trading using opposite Erytech Pharma and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erytech Pharma 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.
The idea behind Erytech Pharma SA and Addex Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Bonds Directory
Find actively traded corporate debentures issued by US companies