Correlation Between Vericel Corp and Addex Therapeutics

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

Diversification Opportunities for Vericel Corp and Addex Therapeutics

  Correlation Coefficient

Very weak diversification

The 3 months correlation between Vericel and Addex is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics and Vericel Corp 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 Vericel Corp Ord 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 Vericel Corp i.e., Vericel Corp and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Vericel Corp and Addex Therapeutics

Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 0.4 times more return on investment than Addex Therapeutics. However, Vericel Corp Ord is 2.49 times less risky than Addex Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Addex Therapeutics is currently generating about -0.1 per unit of risk. If you would invest  2,823  in Vericel Corp Ord on June 28, 2023 and sell it today you would earn a total of  527.00  from holding Vericel Corp Ord or generate 18.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Vericel Corp Ord  vs.  Addex Therapeutics

Vericel Corp Ord 

Vericel Performance

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Over the last 90 days Vericel Corp Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Vericel Corp is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.
Addex Therapeutics 

Addex Performance

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Over the last 90 days Addex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in October 2023. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Vericel Corp and Addex Therapeutics Volatility Contrast

   Predicted Return Density   

Pair Trading with Vericel Corp and Addex Therapeutics

The main advantage of trading using opposite Vericel Corp and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp 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 Vericel Corp Ord 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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