Correlation Between Instil Bio and Molecular Partners

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

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

Diversification Opportunities for Instil Bio and Molecular Partners

0.67

Correlation Coefficient

Instil Bio  Molecular Partners

Poor diversification

The 3 months correlation between Instil and Molecular is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Instil Bio and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and Instil Bio 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 Instil Bio 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 Instil Bio i.e., Instil Bio and Molecular Partners go up and down completely randomly.

Pair Corralation between Instil Bio and Molecular Partners

Considering the 90-day investment horizon Instil Bio is expected to generate 1.68 times more return on investment than Molecular Partners. However, Instil Bio is 1.68 times more volatile than Molecular Partners AG. It trades about -0.03 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  2,003  in Instil Bio on January 14, 2025 and sell it today you would lose (500.00) from holding Instil Bio or give up 24.96% of portfolio value over 90 days.

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

Instil Bio  vs.  Molecular Partners AG

Instil Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Instil Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional 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 weak 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 Instil Bio and Molecular Partners

The main advantage of trading using opposite Instil Bio and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instil Bio 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 Instil Bio 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.