Correlation Between Azenta and Molecular Partners

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

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

Diversification Opportunities for Azenta and Molecular Partners

0.76

Correlation Coefficient

Azenta  Molecular Partners

Poor diversification

The 3 months correlation between Azenta and Molecular is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Azenta 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 Azenta 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 Azenta 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 Azenta i.e., Azenta and Molecular Partners go up and down completely randomly.

Pair Corralation between Azenta and Molecular Partners

Given the investment horizon of 90 days Azenta Inc is expected to under-perform the Molecular Partners. But the stock apears to be less risky and, when comparing its historical volatility, Azenta Inc is 2.87 times less risky than Molecular Partners. The stock trades about -0.2 of its potential returns per unit of risk. The Molecular Partners AG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  386.00  in Molecular Partners AG on February 11, 2024 and sell it today you would lose (6.00) from holding Molecular Partners AG or give up 1.55% of portfolio value over 90 days.

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

Azenta Inc  vs.  Molecular Partners AG

Azenta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Azenta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Molecular Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Molecular Partners AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Azenta and Molecular Partners

The main advantage of trading using opposite Azenta and Molecular Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azenta 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 Azenta 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.