Correlation Between Molecular Partners and Equillium
Can any of the company-specific risk be diversified away by investing in both Molecular Partners and Equillium 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 Equillium 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 Equillium, you can compare the effects of market volatilities on Molecular Partners and Equillium 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 Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molecular Partners and Equillium.
Diversification Opportunities for Molecular Partners and Equillium
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Molecular and Equillium is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium 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 Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Molecular Partners i.e., Molecular Partners and Equillium go up and down completely randomly.
Pair Corralation between Molecular Partners and Equillium
Given the investment horizon of 90 days Molecular Partners is expected to generate 2.3 times less return on investment than Equillium. But when comparing it to its historical volatility, Molecular Partners AG is 1.18 times less risky than Equillium. It trades about 0.02 of its potential returns per unit of risk. Equillium is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Equillium on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Equillium or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molecular Partners AG vs. Equillium
Performance |
| Timeline |
| Molecular Partners |
| Equillium |
Molecular Partners and Equillium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molecular Partners and Equillium
The main advantage of trading using opposite Molecular Partners and Equillium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Partners position performs unexpectedly, Equillium 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 Equillium will offset losses from the drop in Equillium's long position.| Molecular Partners vs. Mineralys Therapeutics, Common | Molecular Partners vs. AN2 Therapeutics | Molecular Partners vs. Pharvaris BV | Molecular Partners vs. PepGen |
| Equillium vs. Cue Biopharma | Equillium vs. Eliem Therapeutics | Equillium vs. Inhibrx | Equillium 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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