Correlation Between Acrivon Therapeutics, and Molecular Partners

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

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

Diversification Opportunities for Acrivon Therapeutics, and Molecular Partners

0.56

Correlation Coefficient

Acrivon Therapeutics,  Molecular Partners

Very weak diversification

The 3 months correlation between Acrivon and Molecular is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Acrivon Therapeutics, Common and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and Acrivon Therapeutics, 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 Acrivon Therapeutics, Common 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 Acrivon Therapeutics, i.e., Acrivon Therapeutics, and Molecular Partners go up and down completely randomly.

Pair Corralation between Acrivon Therapeutics, and Molecular Partners

Given the investment horizon of 90 days Acrivon Therapeutics, Common is expected to under-perform the Molecular Partners. But the stock apears to be less risky and, when comparing its historical volatility, Acrivon Therapeutics, Common is 1.82 times less risky than Molecular Partners. The stock trades about -0.03 of its potential returns per unit of risk. The Molecular Partners AG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  564.00  in Molecular Partners AG on August 31, 2024 and sell it today you would earn a total of  19.00  from holding Molecular Partners AG or generate 3.37% return on investment over 90 days.

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

Acrivon Therapeutics, Common  vs.  Molecular Partners AG

Acrivon Therapeutics,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acrivon Therapeutics, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Molecular Partners

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molecular Partners AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Molecular Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acrivon Therapeutics, and Molecular Partners

The main advantage of trading using opposite Acrivon Therapeutics, and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acrivon Therapeutics, 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 Acrivon Therapeutics, Common 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.