Correlation Between Santhera Pharmaceuticals and Molecular Partners
Can any of the company-specific risk be diversified away by investing in both Santhera Pharmaceuticals 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 Santhera Pharmaceuticals and Molecular Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santhera Pharmaceuticals Holding and Molecular Partners AG, you can compare the effects of market volatilities on Santhera Pharmaceuticals 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 Santhera Pharmaceuticals with a short position of Molecular Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santhera Pharmaceuticals and Molecular Partners.
Diversification Opportunities for Santhera Pharmaceuticals and Molecular Partners
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Santhera and Molecular is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Santhera Pharmaceuticals Holdi and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and Santhera Pharmaceuticals 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 Santhera Pharmaceuticals Holding 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 Santhera Pharmaceuticals i.e., Santhera Pharmaceuticals and Molecular Partners go up and down completely randomly.
Pair Corralation between Santhera Pharmaceuticals and Molecular Partners
Assuming the 90 days trading horizon Santhera Pharmaceuticals Holding is expected to under-perform the Molecular Partners. But the stock apears to be less risky and, when comparing its historical volatility, Santhera Pharmaceuticals Holding is 2.41 times less risky than Molecular Partners. The stock trades about -0.16 of its potential returns per unit of risk. The Molecular Partners AG is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 579.00 in Molecular Partners AG on August 29, 2024 and sell it today you would lose (59.00) from holding Molecular Partners AG or give up 10.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santhera Pharmaceuticals Holdi vs. Molecular Partners AG
Performance |
| Timeline |
| Santhera Pharmaceuticals |
| Molecular Partners |
Santhera Pharmaceuticals and Molecular Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santhera Pharmaceuticals and Molecular Partners
The main advantage of trading using opposite Santhera Pharmaceuticals and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santhera Pharmaceuticals 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.| Santhera Pharmaceuticals vs. Basilea Pharmaceutica AG | Santhera Pharmaceuticals vs. Idorsia | Santhera Pharmaceuticals vs. Newron Pharmaceuticals SpA | Santhera Pharmaceuticals vs. Evolva Holding SA |
| Molecular Partners vs. Idorsia | Molecular Partners vs. Basilea Pharmaceutica AG | Molecular Partners vs. Santhera Pharmaceuticals Holding | Molecular Partners vs. Evolva Holding SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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