Correlation Between Molecular Partners and Mesa Laboratories

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

Diversification Opportunities for Molecular Partners and Mesa Laboratories

-0.29

Correlation Coefficient

Molecular Partners  Mesa Laboratories

Very good diversification

The 3 months correlation between Molecular and Mesa is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Mesa Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Laboratories 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 Mesa Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Laboratories has no effect on the direction of Molecular Partners i.e., Molecular Partners and Mesa Laboratories go up and down completely randomly.

Pair Corralation between Molecular Partners and Mesa Laboratories

Given the investment horizon of 90 days Molecular Partners AG is expected to generate 1.72 times more return on investment than Mesa Laboratories. However, Molecular Partners is 1.72 times more volatile than Mesa Laboratories. It trades about 0.02 of its potential returns per unit of risk. Mesa Laboratories is currently generating about 0.0 per unit of risk. If you would invest  624.00  in Molecular Partners AG on September 16, 2024 and sell it today you would lose (81.00) from holding Molecular Partners AG or give up 12.98% of portfolio value over 90 days.

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

Molecular Partners AG  vs.  Mesa Laboratories

Molecular Partners

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molecular Partners AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent essential indicators, Molecular Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Mesa Laboratories

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mesa Laboratories are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Mesa Laboratories may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Molecular Partners and Mesa Laboratories

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

The idea behind Molecular Partners AG and Mesa Laboratories 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.