Correlation Between Molecular Partners and HCW Biologics
Can any of the company-specific risk be diversified away by investing in both Molecular Partners and HCW Biologics 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 HCW Biologics 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 HCW Biologics, you can compare the effects of market volatilities on Molecular Partners and HCW Biologics 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 HCW Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molecular Partners and HCW Biologics.
Diversification Opportunities for Molecular Partners and HCW Biologics
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Molecular and HCW is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and HCW Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCW Biologics 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 HCW Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCW Biologics has no effect on the direction of Molecular Partners i.e., Molecular Partners and HCW Biologics go up and down completely randomly.
Pair Corralation between Molecular Partners and HCW Biologics
Given the investment horizon of 90 days Molecular Partners is expected to generate 74.49 times less return on investment than HCW Biologics. But when comparing it to its historical volatility, Molecular Partners AG is 5.83 times less risky than HCW Biologics. It trades about 0.01 of its potential returns per unit of risk. HCW Biologics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 49.00 in HCW Biologics on August 28, 2024 and sell it today you would earn a total of 12.00 from holding HCW Biologics or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molecular Partners AG vs. HCW Biologics
Performance |
| Timeline |
| Molecular Partners |
| HCW Biologics |
Molecular Partners and HCW Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molecular Partners and HCW Biologics
The main advantage of trading using opposite Molecular Partners and HCW Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Partners position performs unexpectedly, HCW Biologics 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 HCW Biologics will offset losses from the drop in HCW Biologics' long position.| Molecular Partners vs. Mineralys Therapeutics, Common | Molecular Partners vs. AN2 Therapeutics | Molecular Partners vs. Pharvaris BV | Molecular Partners vs. PepGen |
| HCW Biologics vs. Anebulo Pharmaceuticals | HCW Biologics vs. Rezolute | HCW Biologics vs. Eliem Therapeutics | HCW Biologics 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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