Correlation Between Moderna and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both Moderna and CHINA HUARONG 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 CHINA HUARONG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderna and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on Moderna and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderna and CHINA HUARONG.
Diversification Opportunities for Moderna and CHINA HUARONG
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Moderna and CHINA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of Moderna i.e., Moderna and CHINA HUARONG go up and down completely randomly.
Pair Corralation between Moderna and CHINA HUARONG
Assuming the 90 days horizon Moderna is expected to under-perform the CHINA HUARONG. But the stock apears to be less risky and, when comparing its historical volatility, Moderna is 11.59 times less risky than CHINA HUARONG. The stock trades about -0.05 of its potential returns per unit of risk. The CHINA HUARONG ENERHD 50 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.35 in CHINA HUARONG ENERHD 50 on September 19, 2024 and sell it today you would lose (0.15) from holding CHINA HUARONG ENERHD 50 or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderna vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| Moderna |
| CHINA HUARONG ENERHD |
Moderna and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderna and CHINA HUARONG
The main advantage of trading using opposite Moderna and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG's long position.| Moderna vs. Superior Plus Corp | Moderna vs. SIVERS SEMICONDUCTORS AB | Moderna vs. NorAm Drilling AS | Moderna vs. Norsk Hydro ASA |
| CHINA HUARONG vs. Suntory Beverage Food | CHINA HUARONG vs. Monster Beverage Corp | CHINA HUARONG vs. Collins Foods Limited | CHINA HUARONG vs. EBRO FOODS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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