Correlation Between AC Immune and Monopar Therapeutics

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

Diversification Opportunities for AC Immune and Monopar Therapeutics

-0.5
  Correlation Coefficient

Very good diversification

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

Pair Corralation between AC Immune and Monopar Therapeutics

Given the investment horizon of 90 days AC Immune is expected to generate 9.77 times less return on investment than Monopar Therapeutics. But when comparing it to its historical volatility, AC Immune is 5.4 times less risky than Monopar Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Monopar Therapeutics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,830  in Monopar Therapeutics on November 2, 2024 and sell it today you would earn a total of  2,420  from holding Monopar Therapeutics or generate 132.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

AC Immune  vs.  Monopar Therapeutics

 Performance 
       Timeline  
AC Immune 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AC Immune has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, AC Immune is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Monopar Therapeutics 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Monopar Therapeutics are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Monopar Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

AC Immune and Monopar Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AC Immune and Monopar Therapeutics

The main advantage of trading using opposite AC Immune and Monopar Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AC Immune position performs unexpectedly, Monopar 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 Monopar Therapeutics will offset losses from the drop in Monopar Therapeutics' long position.
The idea behind AC Immune and Monopar 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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