Correlation Between C4 Therapeutics and Molecular Partners

Can any of the company-specific risk be diversified away by investing in both C4 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 C4 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 C4 Therapeutics and Molecular Partners AG, you can compare the effects of market volatilities on C4 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 C4 Therapeutics with a short position of Molecular Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of C4 Therapeutics and Molecular Partners.

Diversification Opportunities for C4 Therapeutics and Molecular Partners

0.84

Correlation Coefficient

C4 Therapeutics  Molecular Partners

Very poor diversification

The 3 months correlation between CCCC and Molecular is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding C4 Therapeutics and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and C4 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 C4 Therapeutics 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 C4 Therapeutics i.e., C4 Therapeutics and Molecular Partners go up and down completely randomly.

Pair Corralation between C4 Therapeutics and Molecular Partners

Given the investment horizon of 90 days C4 Therapeutics is expected to under-perform the Molecular Partners. In addition to that, C4 Therapeutics is 1.02 times more volatile than Molecular Partners AG. It trades about -0.25 of its total potential returns per unit of risk. Molecular Partners AG is currently generating about -0.01 per unit of volatility. If you would invest  499.00  in Molecular Partners AG on December 29, 2024 and sell it today you would lose (43.00) from holding Molecular Partners AG or give up 8.62% of portfolio value over 90 days.

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

C4 Therapeutics  vs.  Molecular Partners AG

C4 Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days C4 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 very healthy essential indicators, Molecular Partners is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with C4 Therapeutics and Molecular Partners

The main advantage of trading using opposite C4 Therapeutics and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C4 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 C4 Therapeutics 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.