Correlation Between ADC Therapeutics and AAON

Can any of the company-specific risk be diversified away by investing in both ADC Therapeutics and AAON 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 ADC Therapeutics and AAON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ADC Therapeutics SA and AAON Inc, you can compare the effects of market volatilities on ADC Therapeutics and AAON 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 ADC Therapeutics with a short position of AAON. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADC Therapeutics and AAON.

Diversification Opportunities for ADC Therapeutics and AAON

0.76

Correlation Coefficient

ADC Therapeutics  AAON

Poor diversification

The 3 months correlation between ADC and AAON is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ADC Therapeutics SA and AAON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAON Inc and ADC 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 ADC Therapeutics SA are associated (or correlated) with AAON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAON Inc has no effect on the direction of ADC Therapeutics i.e., ADC Therapeutics and AAON go up and down completely randomly.

Pair Corralation between ADC Therapeutics and AAON

Given the investment horizon of 90 days ADC Therapeutics is expected to generate 2.6 times less return on investment than AAON. In addition to that, ADC Therapeutics is 1.39 times more volatile than AAON Inc. It trades about 0.02 of its total potential returns per unit of risk. AAON Inc is currently generating about 0.07 per unit of volatility. If you would invest  7,808  in AAON Inc on September 9, 2025 and sell it today you would earn a total of  945.00  from holding AAON Inc or generate 12.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ADC Therapeutics SA  vs.  AAON Inc

ADC Therapeutics

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in ADC Therapeutics SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, ADC Therapeutics is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

AAON Inc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in AAON Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, AAON displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADC Therapeutics and AAON

The main advantage of trading using opposite ADC Therapeutics and AAON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADC Therapeutics position performs unexpectedly, AAON 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 AAON will offset losses from the drop in AAON's long position.

The idea behind ADC Therapeutics SA and AAON Inc 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.