Correlation Between Molecular Partners and Kuros Biosciences

Can any of the company-specific risk be diversified away by investing in both Molecular Partners and Kuros Biosciences 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 Kuros Biosciences 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 Kuros Biosciences AG, you can compare the effects of market volatilities on Molecular Partners and Kuros Biosciences 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 Kuros Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molecular Partners and Kuros Biosciences.

Diversification Opportunities for Molecular Partners and Kuros Biosciences

-0.5

Correlation Coefficient

Molecular Partners  Kuros Biosciences

Very good diversification

The 3 months correlation between Molecular and Kuros is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Kuros Biosciences AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuros Biosciences 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 Kuros Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuros Biosciences has no effect on the direction of Molecular Partners i.e., Molecular Partners and Kuros Biosciences go up and down completely randomly.

Pair Corralation between Molecular Partners and Kuros Biosciences

Assuming the 90 days trading horizon Molecular Partners is expected to generate 29.94 times less return on investment than Kuros Biosciences. But when comparing it to its historical volatility, Molecular Partners AG is 1.3 times less risky than Kuros Biosciences. It trades about 0.01 of its potential returns per unit of risk. Kuros Biosciences AG is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  520.00  in Kuros Biosciences AG on February 5, 2024 and sell it today you would earn a total of  147.00  from holding Kuros Biosciences AG or generate 28.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Molecular Partners AG  vs.  Kuros Biosciences AG

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Kuros Biosciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kuros Biosciences AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kuros Biosciences showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Molecular Partners and Kuros Biosciences

The main advantage of trading using opposite Molecular Partners and Kuros Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molecular Partners position performs unexpectedly, Kuros Biosciences 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 Kuros Biosciences will offset losses from the drop in Kuros Biosciences' long position.

The idea behind Molecular Partners AG and Kuros Biosciences 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .