Correlation Between Moderna and Viking Therapeutics
Can any of the company-specific risk be diversified away by investing in both Moderna and Viking Therapeutics 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 Viking Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderna and Viking Therapeutics, you can compare the effects of market volatilities on Moderna and Viking Therapeutics 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 Viking Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderna and Viking Therapeutics.
Diversification Opportunities for Moderna and Viking Therapeutics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Moderna and Viking is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Viking Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Therapeutics 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 Viking Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Therapeutics has no effect on the direction of Moderna i.e., Moderna and Viking Therapeutics go up and down completely randomly.
Pair Corralation between Moderna and Viking Therapeutics
Given the investment horizon of 90 days Moderna is expected to generate 1.53 times more return on investment than Viking Therapeutics. However, Moderna is 1.53 times more volatile than Viking Therapeutics. It trades about -0.17 of its potential returns per unit of risk. Viking Therapeutics is currently generating about -0.29 per unit of risk. If you would invest 4,317 in Moderna on November 9, 2024 and sell it today you would lose (956.00) from holding Moderna or give up 22.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderna vs. Viking Therapeutics
Performance |
| Timeline |
| Moderna |
| Viking Therapeutics |
Moderna and Viking Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderna and Viking Therapeutics
The main advantage of trading using opposite Moderna and Viking Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, Viking Therapeutics 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 Viking Therapeutics will offset losses from the drop in Viking Therapeutics' long position.| Moderna vs. CureVac NV | Moderna vs. Novavax | Moderna vs. Ocean Biomedical | Moderna vs. Enveric Biosciences |
| Viking Therapeutics vs. Terns Pharmaceuticals | Viking Therapeutics vs. Akero Therapeutics | Viking Therapeutics vs. Madrigal Pharmaceuticals | Viking Therapeutics vs. Sarepta Therapeutics |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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