Correlation Between Molecular Partners and Acumen Pharmaceuticals

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

Diversification Opportunities for Molecular Partners and Acumen Pharmaceuticals

0.71

Correlation Coefficient

Molecular Partners  Acumen Pharmaceuticals

Poor diversification

The 3 months correlation between Molecular and Acumen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals 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 Acumen Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acumen Pharmaceuticals has no effect on the direction of Molecular Partners i.e., Molecular Partners and Acumen Pharmaceuticals go up and down completely randomly.

Pair Corralation between Molecular Partners and Acumen Pharmaceuticals

Given the investment horizon of 90 days Molecular Partners AG is expected to generate 1.12 times more return on investment than Acumen Pharmaceuticals. However, Molecular Partners is 1.12 times more volatile than Acumen Pharmaceuticals. It trades about -0.01 of its potential returns per unit of risk. Acumen Pharmaceuticals is currently generating about -0.13 per unit of risk. If you would invest  499.00  in Molecular Partners AG on December 29, 2024 and sell it today you would lose (43.00) from holding Molecular Partners AG or give up 8.62% of portfolio value over 90 days.

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

Molecular Partners AG  vs.  Acumen Pharmaceuticals

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 very healthy essential indicators, Molecular Partners is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Acumen Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acumen Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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 Molecular Partners and Acumen Pharmaceuticals

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

The idea behind Molecular Partners AG and Acumen Pharmaceuticals 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.