Correlation Between Molecular Partners and NeoGenomics

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

Diversification Opportunities for Molecular Partners and NeoGenomics

0.12

Correlation Coefficient

Molecular Partners  NeoGenomics

Average diversification

The 3 months correlation between Molecular and NeoGenomics is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and NeoGenomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoGenomics 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 NeoGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoGenomics has no effect on the direction of Molecular Partners i.e., Molecular Partners and NeoGenomics go up and down completely randomly.

Pair Corralation between Molecular Partners and NeoGenomics

Given the investment horizon of 90 days Molecular Partners is expected to generate 1.85 times less return on investment than NeoGenomics. In addition to that, Molecular Partners is 1.5 times more volatile than NeoGenomics. It trades about 0.02 of its total potential returns per unit of risk. NeoGenomics is currently generating about 0.05 per unit of volatility. If you would invest  917.00  in NeoGenomics on September 13, 2024 and sell it today you would earn a total of  873.00  from holding NeoGenomics or generate 95.2% return on investment over 90 days.

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

Molecular Partners AG  vs.  NeoGenomics

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.

NeoGenomics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NeoGenomics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, NeoGenomics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Molecular Partners and NeoGenomics

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

The idea behind Molecular Partners AG and NeoGenomics 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.