Correlation Between Molecular Partners and ImmuCell

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

Diversification Opportunities for Molecular Partners and ImmuCell

-0.38

Correlation Coefficient

Molecular Partners  ImmuCell

Very good diversification

The 3 months correlation between Molecular and ImmuCell is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell 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 ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of Molecular Partners i.e., Molecular Partners and ImmuCell go up and down completely randomly.

Pair Corralation between Molecular Partners and ImmuCell

Given the investment horizon of 90 days Molecular Partners AG is expected to under-perform the ImmuCell. But the stock apears to be less risky and, when comparing its historical volatility, Molecular Partners AG is 1.34 times less risky than ImmuCell. The stock trades about -0.07 of its potential returns per unit of risk. The ImmuCell is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  412.00  in ImmuCell on November 29, 2024 and sell it today you would earn a total of  132.00  from holding ImmuCell or generate 32.04% return on investment over 90 days.

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

Molecular Partners AG  vs.  ImmuCell

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 uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ImmuCell

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, ImmuCell exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Molecular Partners and ImmuCell

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

The idea behind Molecular Partners AG and ImmuCell 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.