Correlation Between Medpace Holdings and Molecular Partners

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

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

Diversification Opportunities for Medpace Holdings and Molecular Partners

-0.24

Correlation Coefficient

Medpace Holdings  Molecular Partners

Very good diversification

The 3 months correlation between Medpace and Molecular is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Medpace Holdings and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and Medpace Holdings 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 Medpace Holdings 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 Medpace Holdings i.e., Medpace Holdings and Molecular Partners go up and down completely randomly.

Pair Corralation between Medpace Holdings and Molecular Partners

Given the investment horizon of 90 days Medpace Holdings is expected to generate 0.58 times more return on investment than Molecular Partners. However, Medpace Holdings is 1.73 times less risky than Molecular Partners. It trades about -0.03 of its potential returns per unit of risk. Molecular Partners AG is currently generating about -0.05 per unit of risk. If you would invest  34,182  in Medpace Holdings on September 22, 2024 and sell it today you would lose (454.00) from holding Medpace Holdings or give up 1.33% of portfolio value over 90 days.

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

Medpace Holdings  vs.  Molecular Partners AG

Medpace Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medpace Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Medpace Holdings is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Molecular Partners

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molecular Partners AG are ranked lower than 4 (%) 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 Medpace Holdings and Molecular Partners

The main advantage of trading using opposite Medpace Holdings and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medpace Holdings 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 Medpace Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.