Correlation Between MAHLE Metal and Moderna

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

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

Diversification Opportunities for MAHLE Metal and Moderna

0.83

Correlation Coefficient

MAHLE Metal  Moderna

Very poor diversification

The 3 months correlation between MAHLE and Moderna is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and Moderna go up and down completely randomly.

Pair Corralation between MAHLE Metal and Moderna

Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 0.93 times more return on investment than Moderna. However, MAHLE Metal Leve is 1.07 times less risky than Moderna. It trades about 0.03 of its potential returns per unit of risk. Moderna is currently generating about -0.06 per unit of risk. If you would invest  2,274  in MAHLE Metal Leve on September 27, 2024 and sell it today you would earn a total of  456.00  from holding MAHLE Metal Leve or generate 20.05% return on investment over 90 days.

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

MAHLE Metal Leve  vs.  Moderna

MAHLE Metal Leve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAHLE Metal Leve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private 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 MAHLE Metal and Moderna

The main advantage of trading using opposite MAHLE Metal and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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 MAHLE Metal Leve 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..