Correlation Between Addex Therapeutics and Adial Pharmaceuticals

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

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

Diversification Opportunities for Addex Therapeutics and Adial Pharmaceuticals

-0.35

Correlation Coefficient

Addex Therapeutics  Adial Pharmaceuticals

Very good diversification

The 3 months correlation between Addex and Adial is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Addex Therapeutics and Adial Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adial Pharmaceuticals and Addex 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 Addex Therapeutics are associated (or correlated) with Adial Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adial Pharmaceuticals has no effect on the direction of Addex Therapeutics i.e., Addex Therapeutics and Adial Pharmaceuticals go up and down completely randomly.

Pair Corralation between Addex Therapeutics and Adial Pharmaceuticals

Given the investment horizon of 90 days Addex Therapeutics is expected to generate 7.5 times less return on investment than Adial Pharmaceuticals. But when comparing it to its historical volatility, Addex Therapeutics is 3.13 times less risky than Adial Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Adial Pharmaceuticals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Adial Pharmaceuticals on May 16, 2025 and sell it today you would lose (26.00) from holding Adial Pharmaceuticals or give up 39.39% of portfolio value over 90 days.

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

Addex Therapeutics  vs.  Adial Pharmaceuticals

Addex Therapeutics

Risk-Adjusted Performance

Weakest

Over the last 90 days Addex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

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.

Pair Trading with Addex Therapeutics and Adial Pharmaceuticals

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

The idea behind Addex Therapeutics and Adial Pharmaceuticals 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.