Correlation Between Monte Rosa and Galera Therapeutics

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

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

Diversification Opportunities for Monte Rosa and Galera Therapeutics

-0.05

Correlation Coefficient

Monte Rosa  Galera Therapeutics

Good diversification

The 3 months correlation between Monte and Galera is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Monte Rosa Therapeutics and Galera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galera Therapeutics and Monte Rosa 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 Monte Rosa Therapeutics are associated (or correlated) with Galera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galera Therapeutics has no effect on the direction of Monte Rosa i.e., Monte Rosa and Galera Therapeutics go up and down completely randomly.

Pair Corralation between Monte Rosa and Galera Therapeutics

If you would invest  530.00  in Monte Rosa Therapeutics on September 30, 2024 and sell it today you would earn a total of  176.00  from holding Monte Rosa Therapeutics or generate 33.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Monte Rosa Therapeutics  vs.  Galera Therapeutics

Monte Rosa Therapeutics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monte Rosa Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Monte Rosa exhibited solid returns over the last few months and may actually be approaching a breakup point.

Galera Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galera Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Galera Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Monte Rosa and Galera Therapeutics

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

The idea behind Monte Rosa Therapeutics and Galera Therapeutics 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.