Correlation Between Monopar Therapeutics and Digital Brands
Can any of the company-specific risk be diversified away by investing in both Monopar Therapeutics and Digital Brands 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 Monopar Therapeutics and Digital Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monopar Therapeutics and Digital Brands Group, you can compare the effects of market volatilities on Monopar Therapeutics and Digital Brands 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 Monopar Therapeutics with a short position of Digital Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monopar Therapeutics and Digital Brands.
Diversification Opportunities for Monopar Therapeutics and Digital Brands
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monopar and Digital is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Monopar Therapeutics and Digital Brands Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Brands Group and Monopar 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 Monopar Therapeutics are associated (or correlated) with Digital Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Brands Group has no effect on the direction of Monopar Therapeutics i.e., Monopar Therapeutics and Digital Brands go up and down completely randomly.
Pair Corralation between Monopar Therapeutics and Digital Brands
Given the investment horizon of 90 days Monopar Therapeutics is expected to generate 2.13 times less return on investment than Digital Brands. But when comparing it to its historical volatility, Monopar Therapeutics is 3.19 times less risky than Digital Brands. It trades about 0.19 of its potential returns per unit of risk. Digital Brands Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,249 in Digital Brands Group on October 26, 2024 and sell it today you would earn a total of 351.00 from holding Digital Brands Group or generate 28.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.24% |
| Values | Daily Returns |
Monopar Therapeutics vs. Digital Brands Group
Performance |
| Timeline |
| Monopar Therapeutics |
| Digital Brands Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Monopar Therapeutics and Digital Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monopar Therapeutics and Digital Brands
The main advantage of trading using opposite Monopar Therapeutics and Digital Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monopar Therapeutics position performs unexpectedly, Digital Brands 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 Digital Brands will offset losses from the drop in Digital Brands' long position.| Monopar Therapeutics vs. Anebulo Pharmaceuticals | Monopar Therapeutics vs. Acrivon Therapeutics, Common | Monopar Therapeutics vs. Pmv Pharmaceuticals | Monopar Therapeutics vs. Molecular Partners AG |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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