Correlation Between Molecular Partners and BB Biotech
Can any of the company-specific risk be diversified away by investing in both Molecular Partners and BB Biotech 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 Molecular Partners and BB Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molecular Partners AG and BB Biotech AG, you can compare the effects of market volatilities on Molecular Partners and BB Biotech 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 Molecular Partners with a short position of BB Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molecular Partners and BB Biotech.
Diversification Opportunities for Molecular Partners and BB Biotech
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molecular and BION is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and BB Biotech AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Biotech AG and Molecular Partners 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 Molecular Partners AG are associated (or correlated) with BB Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Biotech AG has no effect on the direction of Molecular Partners i.e., Molecular Partners and BB Biotech go up and down completely randomly.
Pair Corralation between Molecular Partners and BB Biotech
Assuming the 90 days trading horizon Molecular Partners AG is expected to under-perform the BB Biotech. In addition to that, Molecular Partners is 4.08 times more volatile than BB Biotech AG. It trades about -0.07 of its total potential returns per unit of risk. BB Biotech AG is currently generating about -0.09 per unit of volatility. If you would invest 3,650 in BB Biotech AG on October 13, 2024 and sell it today you would lose (75.00) from holding BB Biotech AG or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molecular Partners AG vs. BB Biotech AG
Performance |
| Timeline |
| Molecular Partners |
| BB Biotech AG |
Molecular Partners and BB Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molecular Partners and BB Biotech
The main advantage of trading using opposite Molecular Partners and BB Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Partners position performs unexpectedly, BB Biotech 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 BB Biotech will offset losses from the drop in BB Biotech's long position.| Molecular Partners vs. Idorsia | Molecular Partners vs. Basilea Pharmaceutica AG | Molecular Partners vs. Santhera Pharmaceuticals Holding | Molecular Partners vs. Evolva Holding SA |
| BB Biotech vs. Swiss Life Holding | BB Biotech vs. Swiss Re AG | BB Biotech vs. Helvetia Holding AG | BB Biotech vs. Partners Group Holding |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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