Correlation Between PureTech Health and Molecular Partners
Can any of the company-specific risk be diversified away by investing in both PureTech Health and Molecular Partners 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 PureTech Health and Molecular Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureTech Health PLC and Molecular Partners AG, you can compare the effects of market volatilities on PureTech Health and Molecular Partners 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 PureTech Health with a short position of Molecular Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Molecular Partners.
Diversification Opportunities for PureTech Health and Molecular Partners
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between PureTech and Molecular is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health PLC and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and PureTech Health 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 PureTech Health PLC are associated (or correlated) with Molecular Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molecular Partners has no effect on the direction of PureTech Health i.e., PureTech Health and Molecular Partners go up and down completely randomly.
Pair Corralation between PureTech Health and Molecular Partners
Given the investment horizon of 90 days PureTech Health PLC is expected to under-perform the Molecular Partners. But the stock apears to be less risky and, when comparing its historical volatility, PureTech Health PLC is 1.91 times less risky than Molecular Partners. The stock trades about -0.26 of its potential returns per unit of risk. The Molecular Partners AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 531.00 in Molecular Partners AG on October 25, 2024 and sell it today you would earn a total of 2.00 from holding Molecular Partners AG or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health PLC vs. Molecular Partners AG
Performance |
| Timeline |
| PureTech Health PLC |
| Molecular Partners |
PureTech Health and Molecular Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Molecular Partners
The main advantage of trading using opposite PureTech Health and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health position performs unexpectedly, Molecular Partners 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 Molecular Partners will offset losses from the drop in Molecular Partners' long position.| PureTech Health vs. Molecular Partners AG | PureTech Health vs. MediciNova | PureTech Health vs. Anebulo Pharmaceuticals | PureTech Health vs. Champions Oncology |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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