Correlation Between Monte Rosa and Halozyme Therapeutics

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

Diversification Opportunities for Monte Rosa and Halozyme Therapeutics

-0.06

Correlation Coefficient

Monte Rosa  Halozyme Therapeutics

Good diversification

The 3 months correlation between Monte and Halozyme is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Monte Rosa Therapeutics and Halozyme Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halozyme Therapeutics 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 Halozyme Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halozyme Therapeutics has no effect on the direction of Monte Rosa i.e., Monte Rosa and Halozyme Therapeutics go up and down completely randomly.

Pair Corralation between Monte Rosa and Halozyme Therapeutics

Given the investment horizon of 90 days Monte Rosa Therapeutics is expected to under-perform the Halozyme Therapeutics. In addition to that, Monte Rosa is 1.57 times more volatile than Halozyme Therapeutics. It trades about -0.09 of its total potential returns per unit of risk. Halozyme Therapeutics is currently generating about -0.13 per unit of volatility. If you would invest  5,872  in Halozyme Therapeutics on October 6, 2024 and sell it today you would lose (1,098) from holding Halozyme Therapeutics or give up 18.7% of portfolio value over 90 days.

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

Monte Rosa Therapeutics  vs.  Halozyme Therapeutics

Monte Rosa Therapeutics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monte Rosa Therapeutics are ranked lower than 6 (%) 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.

Halozyme Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halozyme Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Monte Rosa and Halozyme Therapeutics

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

The idea behind Monte Rosa Therapeutics and Halozyme Therapeutics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.