Correlation Between Moderna and Phylogica

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

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

Diversification Opportunities for Moderna and Phylogica

-0.86

Correlation Coefficient

Moderna  Phylogica

Pay attention - limited upside

The 3 months correlation between Moderna and Phylogica is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Phylogica Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phylogica Limited 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 Phylogica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phylogica Limited has no effect on the direction of Moderna i.e., Moderna and Phylogica go up and down completely randomly.

Pair Corralation between Moderna and Phylogica

Assuming the 90 days horizon Moderna is expected to under-perform the Phylogica. But the stock apears to be less risky and, when comparing its historical volatility, Moderna is 34.66 times less risky than Phylogica. The stock trades about -0.2 of its potential returns per unit of risk. The Phylogica Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6.17  in Phylogica Limited on September 15, 2024 and sell it today you would earn a total of  55.83  from holding Phylogica Limited or generate 904.86% return on investment over 90 days.

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

Moderna  vs.  Phylogica Limited

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.

Phylogica Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Phylogica Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Phylogica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moderna and Phylogica

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

The idea behind Moderna and Phylogica Limited 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.