Correlation Between Dermata Therapeutics and Addex Therapeutics

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

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

Diversification Opportunities for Dermata Therapeutics and Addex Therapeutics

-0.1

Correlation Coefficient

Dermata Therapeutics  Addex Therapeutics

Good diversification

The 3 months correlation between Dermata and Addex is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dermata Therapeutics and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Dermata 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 Dermata Therapeutics 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 Dermata Therapeutics i.e., Dermata Therapeutics and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Dermata Therapeutics and Addex Therapeutics

Given the investment horizon of 90 days Dermata Therapeutics is expected to under-perform the Addex Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Dermata Therapeutics is 1.12 times less risky than Addex Therapeutics. The stock trades about -0.09 of its potential returns per unit of risk. The Addex Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  850.00  in Addex Therapeutics on May 20, 2025 and sell it today you would lose (41.00) from holding Addex Therapeutics or give up 4.82% of portfolio value over 90 days.

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

Dermata Therapeutics  vs.  Addex Therapeutics

Dermata Therapeutics

Risk-Adjusted Performance

Weakest

Over the last 90 days Dermata Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Dermata Therapeutics and Addex Therapeutics

The main advantage of trading using opposite Dermata Therapeutics and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dermata Therapeutics 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 Dermata Therapeutics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.