Correlation Between Moderna and Ascendis Pharma

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

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

Diversification Opportunities for Moderna and Ascendis Pharma

0.04

Correlation Coefficient

Moderna  Ascendis Pharma

Significant diversification

The 3 months correlation between Moderna and Ascendis is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Ascendis Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Pharma AS 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 Ascendis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Pharma AS has no effect on the direction of Moderna i.e., Moderna and Ascendis Pharma go up and down completely randomly.

Pair Corralation between Moderna and Ascendis Pharma

Assuming the 90 days trading horizon Moderna is expected to under-perform the Ascendis Pharma. In addition to that, Moderna is 1.48 times more volatile than Ascendis Pharma AS. It trades about -0.04 of its total potential returns per unit of risk. Ascendis Pharma AS is currently generating about 0.18 per unit of volatility. If you would invest  4,884  in Ascendis Pharma AS on September 24, 2024 and sell it today you would earn a total of  451.00  from holding Ascendis Pharma AS or generate 9.23% return on investment over 90 days.

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

Moderna  vs.  Ascendis Pharma AS

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.

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.

Pair Trading with Moderna and Ascendis Pharma

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

The idea behind Moderna and Ascendis Pharma AS 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.