Correlation Between Adial Pharmaceuticals and Addex Therapeutics

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

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

Diversification Opportunities for Adial Pharmaceuticals and Addex Therapeutics

-0.37

Correlation Coefficient

Adial Pharmaceuticals  Addex Therapeutics

Very good diversification

The 3 months correlation between Adial and Addex is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Adial Pharmaceuticals and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Adial Pharmaceuticals 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 Adial Pharmaceuticals 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 Adial Pharmaceuticals i.e., Adial Pharmaceuticals and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Adial Pharmaceuticals and Addex Therapeutics

Given the investment horizon of 90 days Adial Pharmaceuticals is expected to generate 3.1 times more return on investment than Addex Therapeutics. However, Adial Pharmaceuticals is 3.1 times more volatile than Addex Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Addex Therapeutics is currently generating about 0.02 per unit of risk. If you would invest  65.00  in Adial Pharmaceuticals on May 14, 2025 and sell it today you would lose (25.00) from holding Adial Pharmaceuticals or give up 38.46% of portfolio value over 90 days.

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

Adial Pharmaceuticals  vs.  Addex Therapeutics

Adial Pharmaceuticals

Risk-Adjusted Performance

Weakest

Over the last 90 days Adial Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite uncertain forward indicators, Adial Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Addex Therapeutics

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in Addex Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Addex Therapeutics is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Adial Pharmaceuticals and Addex Therapeutics

The main advantage of trading using opposite Adial Pharmaceuticals and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adial Pharmaceuticals 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 Adial Pharmaceuticals 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.