Correlation Between Ascendis Pharma and Moderna

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

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

Diversification Opportunities for Ascendis Pharma and Moderna

0.04

Correlation Coefficient

Ascendis Pharma  Moderna

Significant diversification

The 3 months correlation between Ascendis and Moderna is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Ascendis Pharma 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 Ascendis Pharma AS 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 Ascendis Pharma i.e., Ascendis Pharma and Moderna go up and down completely randomly.

Pair Corralation between Ascendis Pharma and Moderna

Assuming the 90 days trading horizon Ascendis Pharma AS is expected to generate 0.79 times more return on investment than Moderna. However, Ascendis Pharma AS is 1.27 times less risky than Moderna. It trades about 0.04 of its potential returns per unit of risk. Moderna is currently generating about -0.06 per unit of risk. If you would invest  3,978  in Ascendis Pharma AS on September 24, 2024 and sell it today you would earn a total of  1,357  from holding Ascendis Pharma AS or generate 34.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.0%
Values	Daily Returns

Ascendis Pharma AS  vs.  Moderna

Ascendis Pharma AS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendis Pharma AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ascendis Pharma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ascendis Pharma and Moderna

The main advantage of trading using opposite Ascendis Pharma and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Pharma 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 Ascendis Pharma AS 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.