Correlation Between Moderna and DANIMER SCIENTIFIC
Can any of the company-specific risk be diversified away by investing in both Moderna and DANIMER SCIENTIFIC 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 Moderna and DANIMER SCIENTIFIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderna and DANIMER SCIENTIFIC, you can compare the effects of market volatilities on Moderna and DANIMER SCIENTIFIC 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 Moderna with a short position of DANIMER SCIENTIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderna and DANIMER SCIENTIFIC.
Diversification Opportunities for Moderna and DANIMER SCIENTIFIC
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Moderna and DANIMER is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and DANIMER SCIENTIFIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DANIMER SCIENTIFIC and Moderna 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 Moderna are associated (or correlated) with DANIMER SCIENTIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DANIMER SCIENTIFIC has no effect on the direction of Moderna i.e., Moderna and DANIMER SCIENTIFIC go up and down completely randomly.
Pair Corralation between Moderna and DANIMER SCIENTIFIC
Assuming the 90 days horizon Moderna is expected to under-perform the DANIMER SCIENTIFIC. But the stock apears to be less risky and, when comparing its historical volatility, Moderna is 1.76 times less risky than DANIMER SCIENTIFIC. The stock trades about -0.23 of its potential returns per unit of risk. The DANIMER SCIENTIFIC is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 2,266 in DANIMER SCIENTIFIC on September 23, 2024 and sell it today you would lose (1,416) from holding DANIMER SCIENTIFIC or give up 62.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.23% |
| Values | Daily Returns |
Moderna vs. DANIMER SCIENTIFIC
Performance |
| Timeline |
| Moderna |
| DANIMER SCIENTIFIC |
Moderna and DANIMER SCIENTIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderna and DANIMER SCIENTIFIC
The main advantage of trading using opposite Moderna and DANIMER SCIENTIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC will offset losses from the drop in DANIMER SCIENTIFIC's long position.| Moderna vs. Novo Nordisk AS | Moderna vs. CSL LTD SPONADR | Moderna vs. CSL Limited | Moderna vs. Mercedes Benz Group AG |
| DANIMER SCIENTIFIC vs. Novo Nordisk AS | DANIMER SCIENTIFIC vs. CSL LTD SPONADR | DANIMER SCIENTIFIC vs. CSL Limited | DANIMER SCIENTIFIC vs. Mercedes Benz Group AG |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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