Correlation Between BIORA THERAPEUTNEW and Moderna

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

By analyzing existing cross correlation between BIORA THERAPEUTNEW 001 and Moderna, you can compare the effects of market volatilities on BIORA THERAPEUTNEW and Moderna 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 BIORA THERAPEUTNEW with a short position of Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIORA THERAPEUTNEW and Moderna.

Diversification Opportunities for BIORA THERAPEUTNEW and Moderna

-0.81

Correlation Coefficient

BIORA THERAPEUTNEW  Moderna

Pay attention - limited upside

The 3 months correlation between BIORA and Moderna is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding BIORA THERAPEUTNEW 001 and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and BIORA THERAPEUTNEW 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 BIORA THERAPEUTNEW 001 are associated (or correlated) with Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of BIORA THERAPEUTNEW i.e., BIORA THERAPEUTNEW and Moderna go up and down completely randomly.

Pair Corralation between BIORA THERAPEUTNEW and Moderna

Assuming the 90 days trading horizon BIORA THERAPEUTNEW 001 is expected to generate 17.3 times more return on investment than Moderna. However, BIORA THERAPEUTNEW is 17.3 times more volatile than Moderna. It trades about 0.05 of its potential returns per unit of risk. Moderna is currently generating about -0.06 per unit of risk. If you would invest  5,153  in BIORA THERAPEUTNEW 001 on September 28, 2024 and sell it today you would lose (4,643) from holding BIORA THERAPEUTNEW 001 or give up 90.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.25%
Values	Daily Returns

BIORA THERAPEUTNEW 001  vs.  Moderna

BIORA THERAPEUTNEW 001

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days BIORA THERAPEUTNEW 001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, BIORA THERAPEUTNEW reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with BIORA THERAPEUTNEW and Moderna

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

The idea behind BIORA THERAPEUTNEW 001 and Moderna 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.