Correlation Between Addex Therapeutics and Santhera Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Addex Therapeutics and Santhera 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 Santhera 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 Santhera Pharmaceuticals Holding, you can compare the effects of market volatilities on Addex Therapeutics and Santhera 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 Santhera Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addex Therapeutics and Santhera Pharmaceuticals.

Diversification Opportunities for Addex Therapeutics and Santhera Pharmaceuticals

-0.5

Correlation Coefficient

Addex Therapeutics  Santhera Pharmaceuticals

Very good diversification

The 3 months correlation between Addex and Santhera is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Addex Therapeutics and Santhera Pharmaceuticals Holdi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santhera 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 Santhera Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santhera Pharmaceuticals has no effect on the direction of Addex Therapeutics i.e., Addex Therapeutics and Santhera Pharmaceuticals go up and down completely randomly.

Pair Corralation between Addex Therapeutics and Santhera Pharmaceuticals

Assuming the 90 days trading horizon Addex Therapeutics is expected to generate 1.18 times more return on investment than Santhera Pharmaceuticals. However, Addex Therapeutics is 1.18 times more volatile than Santhera Pharmaceuticals Holding. It trades about 0.0 of its potential returns per unit of risk. Santhera Pharmaceuticals Holding is currently generating about -0.03 per unit of risk. If you would invest  5.74  in Addex Therapeutics on April 25, 2025 and sell it today you would lose (0.14) from holding Addex Therapeutics or give up 2.44% of portfolio value over 90 days.

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

Addex Therapeutics  vs.  Santhera Pharmaceuticals Holdi

Addex Therapeutics

Risk-Adjusted Performance

Modest

Over the last 90 days Addex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Addex Therapeutics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Santhera Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Santhera Pharmaceuticals Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Santhera Pharmaceuticals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Addex Therapeutics and Santhera Pharmaceuticals

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

The idea behind Addex Therapeutics and Santhera Pharmaceuticals Holding 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..