Correlation Between Molekule and Federal Signal

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

By analyzing existing cross correlation between Molekule Group and Federal Signal, you can compare the effects of market volatilities on Molekule and Federal Signal 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 Federal Signal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molekule and Federal Signal.

Diversification Opportunities for Molekule and Federal Signal

0.0

Correlation Coefficient

Molekule  Federal Signal

Pay attention - limited upside

The 3 months correlation between Molekule and Federal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Molekule Group and Federal Signal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Signal 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 Federal Signal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Signal has no effect on the direction of Molekule i.e., Molekule and Federal Signal go up and down completely randomly.

Pair Corralation between Molekule and Federal Signal

If you would invest (100.00) in Molekule Group on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Molekule Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Molekule Group  vs.  Federal Signal

Molekule Group

Risk-Adjusted Performance

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 latest stock price mess, may contribute to short-term losses for the institutional investors.

Federal Signal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federal Signal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Molekule and Federal Signal

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

The idea behind Molekule Group and Federal Signal 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.