Correlation Between Molecular Partners and Absci Corp

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

Diversification Opportunities for Molecular Partners and Absci Corp

-0.42

Correlation Coefficient

Molecular Partners  Absci Corp

Very good diversification

The 3 months correlation between Molecular and Absci is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Absci Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absci Corp 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 Absci Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absci Corp has no effect on the direction of Molecular Partners i.e., Molecular Partners and Absci Corp go up and down completely randomly.

Pair Corralation between Molecular Partners and Absci Corp

Given the investment horizon of 90 days Molecular Partners AG is expected to under-perform the Absci Corp. In addition to that, Molecular Partners is 1.06 times more volatile than Absci Corp. It trades about -0.26 of its total potential returns per unit of risk. Absci Corp is currently generating about -0.02 per unit of volatility. If you would invest  449.00  in Absci Corp on June 24, 2024 and sell it today you would lose (17.00) from holding Absci Corp or give up 3.79% of portfolio value over 90 days.

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

Molecular Partners AG  vs.  Absci Corp

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 weak performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in October 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Absci Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Absci Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Absci Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Molecular Partners and Absci Corp

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

The idea behind Molecular Partners AG and Absci Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.