Correlation Between Axcella Health and Moderna

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Can any of the company-specific risk be diversified away by investing in both Axcella Health 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 Axcella Health and Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcella Health and Moderna, you can compare the effects of market volatilities on Axcella Health 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 Axcella Health with a short position of Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcella Health and Moderna.

Diversification Opportunities for Axcella Health and Moderna

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Axcella and Moderna is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Axcella Health and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Axcella Health 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 Axcella Health 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 Axcella Health i.e., Axcella Health and Moderna go up and down completely randomly.

Pair Corralation between Axcella Health and Moderna

Given the investment horizon of 90 days Axcella Health is expected to generate 1.99 times more return on investment than Moderna. However, Axcella Health is 1.99 times more volatile than Moderna. It trades about 0.09 of its potential returns per unit of risk. Moderna is currently generating about 0.09 per unit of risk. If you would invest  184.00  in Axcella Health on April 6, 2022 and sell it today you would earn a total of  28.00  from holding Axcella Health or generate 15.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Axcella Health  vs.  Moderna

 Performance (%) 
      Timeline 
Axcella Health 
Axcella Performance
0 of 100
Over the last 90 days Axcella Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Axcella Health is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Axcella Price Channel

Moderna 
Moderna Performance
0 of 100
Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Moderna is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Moderna Price Channel

Axcella Health and Moderna Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Axcella Health and Moderna

The main advantage of trading using opposite Axcella Health and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcella Health 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 Axcella Health 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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