Correlation Between Molecular Partners and Fundamenta Real

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

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

Diversification Opportunities for Molecular Partners and Fundamenta Real

-0.58

Correlation Coefficient

Molecular Partners  Fundamenta Real

Excellent diversification

The 3 months correlation between Molecular and Fundamenta is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Fundamenta Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamenta Real Estate and Molecular Partners 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 Molecular Partners AG are associated (or correlated) with Fundamenta Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamenta Real Estate has no effect on the direction of Molecular Partners i.e., Molecular Partners and Fundamenta Real go up and down completely randomly.

Pair Corralation between Molecular Partners and Fundamenta Real

Assuming the 90 days trading horizon Molecular Partners AG is expected to under-perform the Fundamenta Real. In addition to that, Molecular Partners is 4.4 times more volatile than Fundamenta Real Estate. It trades about -0.13 of its total potential returns per unit of risk. Fundamenta Real Estate is currently generating about 0.13 per unit of volatility. If you would invest  1,685  in Fundamenta Real Estate on December 25, 2024 and sell it today you would earn a total of  100.00  from holding Fundamenta Real Estate or generate 5.93% return on investment over 90 days.

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

Molecular Partners AG  vs.  Fundamenta Real Estate

Molecular Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Molecular Partners AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Fundamenta Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamenta Real Estate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Fundamenta Real may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Molecular Partners and Fundamenta Real

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

The idea behind Molecular Partners AG and Fundamenta Real Estate 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.