Correlation Between Moleculin Biotech and Evofem Biosciences

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

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

Diversification Opportunities for Moleculin Biotech and Evofem Biosciences

0.53

Correlation Coefficient

Moleculin Biotech  Evofem Biosciences

Very weak diversification

The 3 months correlation between Moleculin and Evofem is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Moleculin Biotech and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences and Moleculin Biotech 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 Moleculin Biotech are associated (or correlated) with Evofem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evofem Biosciences has no effect on the direction of Moleculin Biotech i.e., Moleculin Biotech and Evofem Biosciences go up and down completely randomly.

Pair Corralation between Moleculin Biotech and Evofem Biosciences

Given the investment horizon of 90 days Moleculin Biotech is expected to generate 0.31 times more return on investment than Evofem Biosciences. However, Moleculin Biotech is 3.25 times less risky than Evofem Biosciences. It trades about -0.03 of its potential returns per unit of risk. Evofem Biosciences is currently generating about -0.01 per unit of risk. If you would invest  2,265  in Moleculin Biotech on February 16, 2024 and sell it today you would lose (1,773) from holding Moleculin Biotech or give up 78.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	35.83%
Values	Daily Returns

Moleculin Biotech  vs.  Evofem Biosciences

Moleculin Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moleculin Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly 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.

Evofem Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evofem Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Evofem Biosciences is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Moleculin Biotech and Evofem Biosciences

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

The idea behind Moleculin Biotech and Evofem Biosciences 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.