Correlation Between Molekule and Euro Tech

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

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

Diversification Opportunities for Molekule and Euro Tech

-0.86

Correlation Coefficient

Molekule  Euro Tech

Pay attention - limited upside

The 3 months correlation between Molekule and Euro is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Molekule Group and Euro Tech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Tech Holdings and Molekule 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 Molekule Group are associated (or correlated) with Euro Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Tech Holdings has no effect on the direction of Molekule i.e., Molekule and Euro Tech go up and down completely randomly.

Pair Corralation between Molekule and Euro Tech

If you would invest  225.00  in Molekule Group on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Molekule Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	0.68%
Values	Daily Returns

Molekule Group  vs.  Euro Tech Holdings

Molekule Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Molekule Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Molekule is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Euro Tech Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Euro Tech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Molekule and Euro Tech

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

The idea behind Molekule Group and Euro Tech Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.