Correlation Between Moleculin Biotech and Griffin-American

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Can any of the company-specific risk be diversified away by investing in both Moleculin Biotech and Griffin-American 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 Griffin-American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moleculin Biotech and Griffin-American Healthcare REIT, you can compare the effects of market volatilities on Moleculin Biotech and Griffin-American 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 Griffin-American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moleculin Biotech and Griffin-American.

Diversification Opportunities for Moleculin Biotech and Griffin-American

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Moleculin and Griffin-American is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Moleculin Biotech and Griffin-American Healthcare RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin-American Hea 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 Griffin-American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffin-American Hea has no effect on the direction of Moleculin Biotech i.e., Moleculin Biotech and Griffin-American go up and down completely randomly.

Pair Corralation between Moleculin Biotech and Griffin-American

Given the investment horizon of 90 days Moleculin Biotech is expected to generate 5.04 times more return on investment than Griffin-American. However, Moleculin Biotech is 5.04 times more volatile than Griffin-American Healthcare REIT. It trades about 0.01 of its potential returns per unit of risk. Griffin-American Healthcare REIT is currently generating about -0.13 per unit of risk. If you would invest  143.00  in Moleculin Biotech on September 2, 2022 and sell it today you would lose (2.00)  from holding Moleculin Biotech or give up 1.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.41%
ValuesDaily Returns

Moleculin Biotech  vs.  Griffin-American Healthcare RE

 Performance (%) 
       Timeline  
Moleculin Biotech 
Moleculin Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Moleculin Biotech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Moleculin Biotech is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Moleculin Price Channel

Griffin-American Hea 
Griffin-American Performance
0 of 100
Over the last 90 days Griffin-American Healthcare REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Griffin-American Price Channel

Moleculin Biotech and Griffin-American Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Moleculin Biotech and Griffin-American

The main advantage of trading using opposite Moleculin Biotech and Griffin-American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moleculin Biotech position performs unexpectedly, Griffin-American 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 Griffin-American will offset losses from the drop in Griffin-American's long position.
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The idea behind Moleculin Biotech and Griffin-American Healthcare REIT 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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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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

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