Correlation Between Dynavax Technologies and Molecular Partners

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

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

Diversification Opportunities for Dynavax Technologies and Molecular Partners

-0.45

Correlation Coefficient

Dynavax Technologies  Molecular Partners

Very good diversification

The 3 months correlation between Dynavax and Molecular is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dynavax Technologies and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and Dynavax Technologies 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 Dynavax Technologies 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 Dynavax Technologies i.e., Dynavax Technologies and Molecular Partners go up and down completely randomly.

Pair Corralation between Dynavax Technologies and Molecular Partners

Given the investment horizon of 90 days Dynavax Technologies is expected to generate 0.36 times more return on investment than Molecular Partners. However, Dynavax Technologies is 2.8 times less risky than Molecular Partners. It trades about 0.0 of its potential returns per unit of risk. Molecular Partners AG is currently generating about -0.1 per unit of risk. If you would invest  1,276  in Dynavax Technologies on January 5, 2025 and sell it today you would lose (11.00) from holding Dynavax Technologies or give up 0.86% of portfolio value over 90 days.

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

Dynavax Technologies  vs.  Molecular Partners AG

Dynavax Technologies

Risk-Adjusted Performance

Weak

Over the last 90 days Dynavax Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Dynavax Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Molecular Partners

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dynavax Technologies and Molecular Partners

The main advantage of trading using opposite Dynavax Technologies and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynavax Technologies 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 Dynavax Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.