Correlation Between Molecular Partners and Immatics

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

Diversification Opportunities for Molecular Partners and Immatics

-0.47

Correlation Coefficient

Molecular Partners  Immatics

Very good diversification

The 3 months correlation between Molecular and Immatics is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Molecular Partners AG and Immatics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immatics NV 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 Immatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immatics NV has no effect on the direction of Molecular Partners i.e., Molecular Partners and Immatics go up and down completely randomly.

Pair Corralation between Molecular Partners and Immatics

Given the investment horizon of 90 days Molecular Partners AG is expected to generate 2.45 times more return on investment than Immatics. However, Molecular Partners is 2.45 times more volatile than Immatics NV. It trades about 0.06 of its potential returns per unit of risk. Immatics NV is currently generating about -0.27 per unit of risk. If you would invest  467.00  in Molecular Partners AG on September 19, 2024 and sell it today you would earn a total of  58.00  from holding Molecular Partners AG or generate 12.42% return on investment over 90 days.

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

Molecular Partners AG  vs.  Immatics NV

Molecular Partners

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molecular Partners AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Molecular Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Immatics NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immatics NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Molecular Partners and Immatics

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

The idea behind Molecular Partners AG and Immatics NV 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.