Correlation Between Procter Gamble and Addex Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Addex Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble Health and Addex Therapeutics, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Addex Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Addex Therapeutics.

Diversification Opportunities for Procter Gamble and Addex Therapeutics

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Procter and Addex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble Health and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Procter Gamble 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 Procter Gamble Health 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 Procter Gamble i.e., Procter Gamble and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Procter Gamble and Addex Therapeutics

If you would invest  1,846  in Addex Therapeutics on December 30, 2023 and sell it today you would lose (566.00) from holding Addex Therapeutics or give up 30.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.4%
ValuesDaily Returns

Procter Gamble Health  vs.  Addex Therapeutics

 Performance 
       Timeline  
Procter Gamble Health 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Procter Gamble Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Procter Gamble is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
Addex Therapeutics 

Risk-Adjusted Performance

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Good
Compared to the overall equity markets, risk-adjusted returns on investments in Addex Therapeutics are ranked lower than 15 (%) 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.

Procter Gamble and Addex Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Procter Gamble and Addex Therapeutics

The main advantage of trading using opposite Procter Gamble and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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 Procter Gamble Health 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.
Check out your portfolio center.
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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