Correlation Between American Express and Addex Therapeutics

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

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

Diversification Opportunities for American Express and Addex Therapeutics

0.53

Correlation Coefficient

American Express  Addex Therapeutics

Very weak diversification

The 3 months correlation between American and Addex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and American Express 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 American Express 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 American Express i.e., American Express and Addex Therapeutics go up and down completely randomly.

Pair Corralation between American Express and Addex Therapeutics

Considering the 90-day investment horizon American Express is expected to generate 0.32 times more return on investment than Addex Therapeutics. However, American Express is 3.16 times less risky than Addex Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Addex Therapeutics is currently generating about 0.01 per unit of risk. If you would invest  27,733  in American Express on May 4, 2025 and sell it today you would earn a total of  1,694  from holding American Express or generate 6.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

American Express  vs.  Addex Therapeutics

American Express

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, American Express may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Addex Therapeutics

Risk-Adjusted Performance

Very Weak

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.

Pair Trading with American Express and Addex Therapeutics

The main advantage of trading using opposite American Express and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express 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 American Express 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.