Correlation Between Partners Group and Molecular Partners

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

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

Diversification Opportunities for Partners Group and Molecular Partners

-0.14

Correlation Coefficient

Partners Group  Molecular Partners

Good diversification

The 3 months correlation between Partners and Molecular is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Partners Group Holding and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and Partners Group 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 Partners Group Holding 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 Partners Group i.e., Partners Group and Molecular Partners go up and down completely randomly.

Pair Corralation between Partners Group and Molecular Partners

Assuming the 90 days trading horizon Partners Group Holding is expected to generate 0.42 times more return on investment than Molecular Partners. However, Partners Group Holding is 2.39 times less risky than Molecular Partners. It trades about 0.06 of its potential returns per unit of risk. Molecular Partners AG is currently generating about 0.0 per unit of risk. If you would invest  82,800  in Partners Group Holding on October 7, 2024 and sell it today you would earn a total of  41,750  from holding Partners Group Holding or generate 50.42% return on investment over 90 days.

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

Partners Group Holding  vs.  Molecular Partners AG

Partners Group Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Partners Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Partners Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 fairly abnormal basic indicators, Molecular Partners showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Partners Group and Molecular Partners

The main advantage of trading using opposite Partners Group and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partners Group 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 Partners Group Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.