Correlation Between ADC Therapeutics and Treace Medical

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

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

Diversification Opportunities for ADC Therapeutics and Treace Medical

-0.34

Correlation Coefficient

ADC Therapeutics  Treace Medical

Very good diversification

The 3 months correlation between ADC and Treace is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ADC Therapeutics SA and Treace Medical Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treace Medical Concepts and ADC 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 ADC Therapeutics SA are associated (or correlated) with Treace Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treace Medical Concepts has no effect on the direction of ADC Therapeutics i.e., ADC Therapeutics and Treace Medical go up and down completely randomly.

Pair Corralation between ADC Therapeutics and Treace Medical

Given the investment horizon of 90 days ADC Therapeutics SA is expected to generate 0.76 times more return on investment than Treace Medical. However, ADC Therapeutics SA is 1.31 times less risky than Treace Medical. It trades about 0.15 of its potential returns per unit of risk. Treace Medical Concepts is currently generating about -0.25 per unit of risk. If you would invest  317.00  in ADC Therapeutics SA on August 26, 2025 and sell it today you would earn a total of  120.00  from holding ADC Therapeutics SA or generate 37.85% return on investment over 90 days.

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

ADC Therapeutics SA  vs.  Treace Medical Concepts

ADC Therapeutics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ADC Therapeutics SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, ADC Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Treace Medical Concepts

Risk-Adjusted Performance

Weakest

Over the last 90 days Treace Medical Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in December 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with ADC Therapeutics and Treace Medical

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

The idea behind ADC Therapeutics SA and Treace Medical Concepts 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.