Correlation Between Nel ASA and Moderna
Can any of the company-specific risk be diversified away by investing in both Nel ASA 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 Nel ASA and Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nel ASA and Moderna, you can compare the effects of market volatilities on Nel ASA 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 Nel ASA with a short position of Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nel ASA and Moderna.
Diversification Opportunities for Nel ASA and Moderna
Almost no diversification
The 3 months correlation between Nel and Moderna is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Nel ASA and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Nel ASA 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 Nel ASA 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 Nel ASA i.e., Nel ASA and Moderna go up and down completely randomly.
Pair Corralation between Nel ASA and Moderna
Assuming the 90 days horizon Nel ASA is expected to under-perform the Moderna. In addition to that, Nel ASA is 1.02 times more volatile than Moderna. It trades about -0.34 of its total potential returns per unit of risk. Moderna is currently generating about -0.21 per unit of volatility. If you would invest 5,060 in Moderna on August 29, 2024 and sell it today you would lose (1,060) from holding Moderna or give up 20.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nel ASA vs. Moderna
Performance |
| Timeline |
| Nel ASA |
| Moderna |
Nel ASA and Moderna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nel ASA and Moderna
The main advantage of trading using opposite Nel ASA and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nel ASA 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.| Nel ASA vs. Powercell Sweden | Nel ASA vs. ITM Power Plc | Nel ASA vs. Ballard Power Systems | Nel ASA vs. Plug Power |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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