Correlation Between PepGen and Molecular Partners

Can any of the company-specific risk be diversified away by investing in both PepGen and Molecular Partners 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 PepGen and Molecular Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PepGen and Molecular Partners AG, you can compare the effects of market volatilities on PepGen and Molecular Partners 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 PepGen with a short position of Molecular Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepGen and Molecular Partners.

Diversification Opportunities for PepGen and Molecular Partners

0.28

Correlation Coefficient

PepGen  Molecular Partners

Modest diversification

The 3 months correlation between PepGen and Molecular is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and PepGen 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 PepGen are associated (or correlated) with Molecular Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molecular Partners has no effect on the direction of PepGen i.e., PepGen and Molecular Partners go up and down completely randomly.

Pair Corralation between PepGen and Molecular Partners

Given the investment horizon of 90 days PepGen is expected to under-perform the Molecular Partners. In addition to that, PepGen is 3.41 times more volatile than Molecular Partners AG. It trades about -0.04 of its total potential returns per unit of risk. Molecular Partners AG is currently generating about -0.01 per unit of volatility. If you would invest  499.00  in Molecular Partners AG on December 30, 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

PepGen  vs.  Molecular Partners AG

PepGen

Risk-Adjusted Performance

Very Weak

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

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 newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PepGen and Molecular Partners

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

The idea behind PepGen and Molecular Partners AG 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.