Correlation Between Meyer Burger and Addex Therapeutics
Can any of the company-specific risk be diversified away by investing in both Meyer Burger 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 Meyer Burger and Addex Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meyer Burger Tech and Addex Therapeutics, you can compare the effects of market volatilities on Meyer Burger 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 Meyer Burger with a short position of Addex Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meyer Burger and Addex Therapeutics.
Diversification Opportunities for Meyer Burger and Addex Therapeutics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Meyer and Addex is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Meyer Burger Tech and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Meyer Burger 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 Meyer Burger Tech 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 Meyer Burger i.e., Meyer Burger and Addex Therapeutics go up and down completely randomly.
Pair Corralation between Meyer Burger and Addex Therapeutics
Assuming the 90 days trading horizon Meyer Burger Tech is expected to under-perform the Addex Therapeutics. In addition to that, Meyer Burger is 2.85 times more volatile than Addex Therapeutics. It trades about -0.27 of its total potential returns per unit of risk. Addex Therapeutics is currently generating about -0.31 per unit of volatility. If you would invest 8.56 in Addex Therapeutics on August 25, 2024 and sell it today you would lose (2.90) from holding Addex Therapeutics or give up 33.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meyer Burger Tech vs. Addex Therapeutics
Performance |
| Timeline |
| Meyer Burger Tech |
| Addex Therapeutics |
Meyer Burger and Addex Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meyer Burger and Addex Therapeutics
The main advantage of trading using opposite Meyer Burger and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meyer Burger 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.| Meyer Burger vs. Santhera Pharmaceuticals Holding | Meyer Burger vs. Newron Pharmaceuticals SpA | Meyer Burger vs. Basilea Pharmaceutica AG | Meyer Burger vs. Evolva Holding SA |
| Addex Therapeutics vs. Santhera Pharmaceuticals Holding | Addex Therapeutics vs. Newron Pharmaceuticals SpA | Addex Therapeutics vs. Basilea Pharmaceutica AG | Addex Therapeutics vs. Evolva Holding SA |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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