Correlation Between Molecular Partners and Genenta Science

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

Diversification Opportunities for Molecular Partners and Genenta Science

0.56

Correlation Coefficient

Molecular Partners  Genenta Science

Very weak diversification

The 3 months correlation between Molecular and Genenta is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Genenta Science SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genenta Science SpA 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 Genenta Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genenta Science SpA has no effect on the direction of Molecular Partners i.e., Molecular Partners and Genenta Science go up and down completely randomly.

Pair Corralation between Molecular Partners and Genenta Science

Given the investment horizon of 90 days Molecular Partners AG is expected to generate 0.7 times more return on investment than Genenta Science. However, Molecular Partners AG is 1.43 times less risky than Genenta Science. It trades about -0.06 of its potential returns per unit of risk. Genenta Science SpA is currently generating about -0.1 per unit of risk. If you would invest  583.00  in Molecular Partners AG on December 4, 2024 and sell it today you would lose (80.00) from holding Molecular Partners AG or give up 13.72% of portfolio value over 90 days.

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

Molecular Partners AG  vs.  Genenta Science SpA

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 latest uncertain performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Genenta Science SpA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genenta Science SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Molecular Partners and Genenta Science

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

The idea behind Molecular Partners AG and Genenta Science SpA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.