Correlation Between Erytech Pharma and Addex Therapeutics
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 3.49% |
Values | Daily Returns |
Erytech Pharma SA vs. Addex Therapeutics
Performance |
Timeline |
Erytech Pharma SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Addex Therapeutics |
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.Erytech Pharma vs. Genfit | Erytech Pharma vs. Eliem Therapeutics | Erytech Pharma vs. HCW Biologics | Erytech Pharma vs. Aptorum Group Ltd |
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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.
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