Correlation Between Kineta and Molecular Partners

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

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

Diversification Opportunities for Kineta and Molecular Partners

0.24

Correlation Coefficient

Kineta  Molecular Partners

Modest diversification

The 3 months correlation between Kineta and Molecular is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kineta 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 Kineta 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 Kineta 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 Kineta i.e., Kineta and Molecular Partners go up and down completely randomly.

Pair Corralation between Kineta and Molecular Partners

Allowing for the 90-day total investment horizon Kineta Inc is expected to under-perform the Molecular Partners. In addition to that, Kineta is 2.34 times more volatile than Molecular Partners AG. It trades about -0.01 of its total potential returns per unit of risk. Molecular Partners AG is currently generating about 0.09 per unit of volatility. If you would invest  376.00  in Molecular Partners AG on March 9, 2024 and sell it today you would earn a total of  31.00  from holding Molecular Partners AG or generate 8.24% return on investment over 90 days.

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

Kineta Inc  vs.  Molecular Partners AG

Kineta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Molecular Partners

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Molecular Partners AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Molecular Partners may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Kineta and Molecular Partners

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

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.