Correlation Between Moderna and Avax Techs
Can any of the company-specific risk be diversified away by investing in both Moderna and Avax Techs 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 Avax Techs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderna and Avax Techs, you can compare the effects of market volatilities on Moderna and Avax Techs 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 Avax Techs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderna and Avax Techs.
Diversification Opportunities for Moderna and Avax Techs
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Moderna and Avax is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Avax Techs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avax Techs 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 Avax Techs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avax Techs has no effect on the direction of Moderna i.e., Moderna and Avax Techs go up and down completely randomly.
Pair Corralation between Moderna and Avax Techs
Given the investment horizon of 90 days Moderna is expected to generate 0.7 times more return on investment than Avax Techs. However, Moderna is 1.44 times less risky than Avax Techs. It trades about -0.06 of its potential returns per unit of risk. Avax Techs is currently generating about -0.05 per unit of risk. If you would invest 13,175 in Moderna on August 29, 2024 and sell it today you would lose (8,970) from holding Moderna or give up 68.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Moderna vs. Avax Techs
Performance |
| Timeline |
| Moderna |
| Avax Techs |
Moderna and Avax Techs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderna and Avax Techs
The main advantage of trading using opposite Moderna and Avax Techs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, Avax Techs 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 Avax Techs will offset losses from the drop in Avax Techs' long position.| 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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