Correlation Between Molecular Partners and Adagene
Can any of the company-specific risk be diversified away by investing in both Molecular Partners and Adagene 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 Adagene 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 Adagene, you can compare the effects of market volatilities on Molecular Partners and Adagene 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 Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molecular Partners and Adagene.
Diversification Opportunities for Molecular Partners and Adagene
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Molecular and Adagene is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene 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 Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Molecular Partners i.e., Molecular Partners and Adagene go up and down completely randomly.
Pair Corralation between Molecular Partners and Adagene
Given the investment horizon of 90 days Molecular Partners AG is expected to generate 1.38 times more return on investment than Adagene. However, Molecular Partners is 1.38 times more volatile than Adagene. It trades about 0.12 of its potential returns per unit of risk. Adagene is currently generating about -0.14 per unit of risk. If you would invest 508.00 in Molecular Partners AG on October 21, 2024 and sell it today you would earn a total of 48.00 from holding Molecular Partners AG or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molecular Partners AG vs. Adagene
Performance |
| Timeline |
| Molecular Partners |
| Adagene |
Molecular Partners and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molecular Partners and Adagene
The main advantage of trading using opposite Molecular Partners and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Partners position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Molecular Partners vs. Mineralys Therapeutics, Common | Molecular Partners vs. AN2 Therapeutics | Molecular Partners vs. Pharvaris BV | Molecular Partners vs. PepGen |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |