Correlation Between Akero Therapeutics and Moderna
Can any of the company-specific risk be diversified away by investing in both Akero Therapeutics and Moderna 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 Akero Therapeutics and Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akero Therapeutics and Moderna, you can compare the effects of market volatilities on Akero Therapeutics and Moderna 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 Akero Therapeutics with a short position of Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akero Therapeutics and Moderna.
Diversification Opportunities for Akero Therapeutics and Moderna
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Akero and Moderna is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Akero Therapeutics and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Akero Therapeutics 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 Akero Therapeutics are associated (or correlated) with Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Akero Therapeutics i.e., Akero Therapeutics and Moderna go up and down completely randomly.
Pair Corralation between Akero Therapeutics and Moderna
Given the investment horizon of 90 days Akero Therapeutics is expected to generate 0.93 times more return on investment than Moderna. However, Akero Therapeutics is 1.08 times less risky than Moderna. It trades about 0.14 of its potential returns per unit of risk. Moderna is currently generating about -0.3 per unit of risk. If you would invest 2,971 in Akero Therapeutics on August 27, 2024 and sell it today you would earn a total of 302.00 from holding Akero Therapeutics or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akero Therapeutics vs. Moderna
Performance |
| Timeline |
| Akero Therapeutics |
| Moderna |
Akero Therapeutics and Moderna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akero Therapeutics and Moderna
The main advantage of trading using opposite Akero Therapeutics and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akero Therapeutics position performs unexpectedly, Moderna 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 Moderna will offset losses from the drop in Moderna's long position.| Akero Therapeutics vs. Eliem Therapeutics | Akero Therapeutics vs. HCW Biologics | Akero Therapeutics vs. Scpharmaceuticals | Akero Therapeutics vs. Milestone Pharmaceuticals |
| Moderna vs. CureVac NV | Moderna vs. Novavax | Moderna vs. Ocean Biomedical | Moderna vs. Enveric Biosciences |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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