Correlation Between Molecular Partners and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Molecular Partners and Sotera Health 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 Sotera Health 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 Sotera Health Co, you can compare the effects of market volatilities on Molecular Partners and Sotera Health 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 Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molecular Partners and Sotera Health.
Diversification Opportunities for Molecular Partners and Sotera Health
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molecular and Sotera is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health 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 Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Molecular Partners i.e., Molecular Partners and Sotera Health go up and down completely randomly.
Pair Corralation between Molecular Partners and Sotera Health
Given the investment horizon of 90 days Molecular Partners AG is expected to generate 2.78 times more return on investment than Sotera Health. However, Molecular Partners is 2.78 times more volatile than Sotera Health Co. It trades about 0.04 of its potential returns per unit of risk. Sotera Health Co is currently generating about -0.03 per unit of risk. If you would invest 433.00 in Molecular Partners AG on September 20, 2024 and sell it today you would earn a total of 92.00 from holding Molecular Partners AG or generate 21.25% 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. Sotera Health Co
Performance |
| Timeline |
| Molecular Partners |
| Sotera Health |
Molecular Partners and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molecular Partners and Sotera Health
The main advantage of trading using opposite Molecular Partners and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Partners position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| Molecular Partners vs. Mineralys Therapeutics, Common | Molecular Partners vs. AN2 Therapeutics | Molecular Partners vs. Pharvaris BV | Molecular Partners vs. PepGen |
| Sotera Health vs. Molecular Partners AG | Sotera Health vs. MediciNova | Sotera Health vs. Anebulo Pharmaceuticals | Sotera Health vs. Shattuck Labs |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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