Correlation Between Moderna and Superior Plus

Can any of the company-specific risk be diversified away by investing in both Moderna and Superior Plus 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 Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moderna and Superior Plus Corp, you can compare the effects of market volatilities on Moderna and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderna and Superior Plus.

Diversification Opportunities for Moderna and Superior Plus

0.77

Correlation Coefficient

Moderna  Superior Plus

Poor diversification

The 3 months correlation between Moderna and Superior is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Moderna i.e., Moderna and Superior Plus go up and down completely randomly.

Pair Corralation between Moderna and Superior Plus

Assuming the 90 days horizon Moderna is expected to under-perform the Superior Plus. But the stock apears to be less risky and, when comparing its historical volatility, Moderna is 1.04 times less risky than Superior Plus. The stock trades about -0.19 of its potential returns per unit of risk. The Superior Plus Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  487.00  in Superior Plus Corp on September 13, 2024 and sell it today you would lose (47.00) from holding Superior Plus Corp or give up 9.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Moderna  vs.  Superior Plus Corp

Moderna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Moderna and Superior Plus

The main advantage of trading using opposite Moderna and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.

The idea behind Moderna and Superior Plus Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.