Correlation Between Moderna and Curative Biotechnology
Can any of the company-specific risk be diversified away by investing in both Moderna and Curative Biotechnology 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 Curative Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderna and Curative Biotechnology, you can compare the effects of market volatilities on Moderna and Curative Biotechnology 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 Curative Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderna and Curative Biotechnology.
Diversification Opportunities for Moderna and Curative Biotechnology
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Moderna and Curative is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Curative Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curative Biotechnology 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 Curative Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curative Biotechnology has no effect on the direction of Moderna i.e., Moderna and Curative Biotechnology go up and down completely randomly.
Pair Corralation between Moderna and Curative Biotechnology
Given the investment horizon of 90 days Moderna is expected to under-perform the Curative Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Moderna is 2.1 times less risky than Curative Biotechnology. The stock trades about -0.17 of its potential returns per unit of risk. The Curative Biotechnology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.18 in Curative Biotechnology on November 9, 2024 and sell it today you would earn a total of 0.07 from holding Curative Biotechnology or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderna vs. Curative Biotechnology
Performance |
| Timeline |
| Moderna |
| Curative Biotechnology |
Moderna and Curative Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderna and Curative Biotechnology
The main advantage of trading using opposite Moderna and Curative Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, Curative Biotechnology 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 Curative Biotechnology will offset losses from the drop in Curative Biotechnology's long position.| Moderna vs. CureVac NV | Moderna vs. Novavax | Moderna vs. Ocean Biomedical | Moderna vs. Enveric Biosciences |
| Curative Biotechnology vs. Biotron Limited | Curative Biotechnology vs. biOasis Technologies | Curative Biotechnology vs. Covalon Technologies | Curative Biotechnology vs. Mosaic Immunoengineering |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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