Correlation Between Evolva Holding and Molecular Partners

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

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

Diversification Opportunities for Evolva Holding and Molecular Partners

0.37

Correlation Coefficient

Evolva Holding  Molecular Partners

Weak diversification

The 3 months correlation between Evolva and Molecular is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Evolva Holding SA and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and Evolva Holding 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 Evolva Holding SA 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 Evolva Holding i.e., Evolva Holding and Molecular Partners go up and down completely randomly.

Pair Corralation between Evolva Holding and Molecular Partners

Assuming the 90 days trading horizon Evolva Holding is expected to generate 3.52 times less return on investment than Molecular Partners. But when comparing it to its historical volatility, Evolva Holding SA is 1.04 times less risky than Molecular Partners. It trades about 0.01 of its potential returns per unit of risk. Molecular Partners AG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  440.00  in Molecular Partners AG on September 27, 2024 and sell it today you would earn a total of  23.00  from holding Molecular Partners AG or generate 5.23% return on investment over 90 days.

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

Evolva Holding SA  vs.  Molecular Partners AG

Evolva Holding SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolva Holding SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Evolva Holding 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 Evolva Holding and Molecular Partners

The main advantage of trading using opposite Evolva Holding and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolva Holding 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 Evolva Holding SA 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.

Check out your portfolio center.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.