Correlation Between Monte Rosa and Alpine Immune

Can any of the company-specific risk be diversified away by investing in both Monte Rosa and Alpine Immune 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 Monte Rosa and Alpine Immune into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Monte Rosa Therapeutics and Alpine Immune Sciences, you can compare the effects of market volatilities on Monte Rosa and Alpine Immune 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 Monte Rosa with a short position of Alpine Immune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monte Rosa and Alpine Immune.

Diversification Opportunities for Monte Rosa and Alpine Immune

0.59

Correlation Coefficient

Monte Rosa  Alpine Immune

Very weak diversification

The 3 months correlation between Monte and Alpine is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Monte Rosa Therapeutics and Alpine Immune Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Immune Sciences and Monte Rosa 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 Monte Rosa Therapeutics are associated (or correlated) with Alpine Immune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Immune Sciences has no effect on the direction of Monte Rosa i.e., Monte Rosa and Alpine Immune go up and down completely randomly.

Pair Corralation between Monte Rosa and Alpine Immune

If you would invest  1,237  in Alpine Immune Sciences on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Alpine Immune Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Monte Rosa Therapeutics  vs.  Alpine Immune Sciences

Monte Rosa Therapeutics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monte Rosa Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Monte Rosa exhibited solid returns over the last few months and may actually be approaching a breakup point.

Alpine Immune Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpine Immune Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Alpine Immune is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Monte Rosa and Alpine Immune

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

The idea behind Monte Rosa Therapeutics and Alpine Immune Sciences 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.

Check out your portfolio center.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.