Correlation Between Coca Cola and Addex Therapeutics

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

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

Diversification Opportunities for Coca Cola and Addex Therapeutics

-0.23

Correlation Coefficient

Coca Cola  Addex Therapeutics

Very good diversification

The 3 months correlation between Coca and Addex is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Coca Cola and Addex Therapeutics

Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.15 times more return on investment than Addex Therapeutics. However, The Coca Cola is 6.69 times less risky than Addex Therapeutics. It trades about 0.22 of its potential returns per unit of risk. Addex Therapeutics is currently generating about 0.0 per unit of risk. If you would invest  6,612  in The Coca Cola on August 9, 2025 and sell it today you would earn a total of  443.00  from holding The Coca Cola or generate 6.7% return on investment over 90 days.

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

The Coca Cola  vs.  Addex Therapeutics

Coca Cola

Risk-Adjusted Performance

Weakest

Over the last 90 days The Coca Cola has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Coca Cola is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Addex Therapeutics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Addex Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Addex Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coca Cola and Addex Therapeutics

The main advantage of trading using opposite Coca Cola and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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 The Coca Cola 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.