Correlation Between CSP and Molecular Partners
Can any of the company-specific risk be diversified away by investing in both CSP 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 CSP and Molecular Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSP Inc and Molecular Partners AG, you can compare the effects of market volatilities on CSP 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 CSP with a short position of Molecular Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSP and Molecular Partners.
Diversification Opportunities for CSP and Molecular Partners
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSP and Molecular is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and Molecular Partners AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molecular Partners and CSP 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 CSP Inc 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 CSP i.e., CSP and Molecular Partners go up and down completely randomly.
Pair Corralation between CSP and Molecular Partners
Given the investment horizon of 90 days CSP Inc is expected to under-perform the Molecular Partners. In addition to that, CSP is 1.03 times more volatile than Molecular Partners AG. It trades about -0.07 of its total potential returns per unit of risk. Molecular Partners AG is currently generating about 0.02 per unit of volatility. If you would invest 357.00 in Molecular Partners AG on April 16, 2025 and sell it today you would lose (2.00) from holding Molecular Partners AG or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSP Inc vs. Molecular Partners AG
Performance |
| Timeline |
| CSP Inc |
| Molecular Partners |
CSP and Molecular Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSP and Molecular Partners
The main advantage of trading using opposite CSP and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSP 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 CSP Inc 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.| Molecular Partners vs. Caribou Biosciences | Molecular Partners vs. Crispr Therapeutics AG | Molecular Partners vs. Verve Therapeutics | Molecular Partners vs. Beam Therapeutics |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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