Correlation Between Forsys Metals and Molecular Partners

Can any of the company-specific risk be diversified away by investing in both Forsys Metals 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 Forsys Metals and Molecular Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Forsys Metals Corp and Molecular Partners AG, you can compare the effects of market volatilities on Forsys Metals 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 Forsys Metals with a short position of Molecular Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forsys Metals and Molecular Partners.

Diversification Opportunities for Forsys Metals and Molecular Partners

0.64

Correlation Coefficient

Forsys Metals  Molecular Partners

Poor diversification

The 3 months correlation between Forsys and Molecular is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Forsys Metals Corp and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and Forsys Metals 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 Forsys Metals Corp 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 Forsys Metals i.e., Forsys Metals and Molecular Partners go up and down completely randomly.

Pair Corralation between Forsys Metals and Molecular Partners

Assuming the 90 days horizon Forsys Metals Corp is expected to under-perform the Molecular Partners. But the pink sheet apears to be less risky and, when comparing its historical volatility, Forsys Metals Corp is 1.22 times less risky than Molecular Partners. The pink sheet trades about -0.08 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  483.00  in Molecular Partners AG on February 2, 2024 and sell it today you would lose (96.00) from holding Molecular Partners AG or give up 19.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Forsys Metals Corp  vs.  Molecular Partners AG

Forsys Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forsys Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Molecular Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Molecular Partners AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Forsys Metals and Molecular Partners

The main advantage of trading using opposite Forsys Metals and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forsys Metals 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.

The idea behind Forsys Metals Corp and Molecular Partners AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.