Correlation Between Molecular Partners and CSL
Can any of the company-specific risk be diversified away by investing in both Molecular Partners and CSL 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 CSL 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 CSL, you can compare the effects of market volatilities on Molecular Partners and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molecular Partners and CSL.
Diversification Opportunities for Molecular Partners and CSL
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Molecular and CSL is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Molecular Partners i.e., Molecular Partners and CSL go up and down completely randomly.
Pair Corralation between Molecular Partners and CSL
Given the investment horizon of 90 days Molecular Partners AG is expected to generate 4.21 times more return on investment than CSL. However, Molecular Partners is 4.21 times more volatile than CSL. It trades about 0.02 of its potential returns per unit of risk. CSL is currently generating about -0.01 per unit of risk. If you would invest 664.00 in Molecular Partners AG on August 27, 2024 and sell it today you would lose (135.00) from holding Molecular Partners AG or give up 20.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molecular Partners AG vs. CSL
Performance |
| Timeline |
| Molecular Partners |
| CSL |
Molecular Partners and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molecular Partners and CSL
The main advantage of trading using opposite Molecular Partners and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Partners position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Molecular Partners vs. Mineralys Therapeutics, Common | Molecular Partners vs. AN2 Therapeutics | Molecular Partners vs. Pharvaris BV | Molecular Partners vs. PepGen |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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