Correlation Between Brickell Biotech and Moderna

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

Diversification Opportunities for Brickell Biotech and Moderna

-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between Brickell and Moderna is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Brickell Biotech and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Brickell Biotech 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 Brickell Biotech 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 Brickell Biotech i.e., Brickell Biotech and Moderna go up and down completely randomly.

Pair Corralation between Brickell Biotech and Moderna

Considering the 90-day investment horizon Brickell Biotech is expected to under-perform the Moderna. In addition to that, Brickell Biotech is 3.19 times more volatile than Moderna. It trades about -0.11 of its total potential returns per unit of risk. Moderna is currently generating about 0.1 per unit of volatility. If you would invest  14,000  in Moderna on April 6, 2022 and sell it today you would earn a total of  995.00  from holding Moderna or generate 7.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Brickell Biotech  vs.  Moderna

 Performance (%) 
      Timeline 
Brickell Biotech 
Brickell Performance
0 of 100
Over the last 90 days Brickell Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Structure and Payout Changes

Last Split Factor
1:45
Dividend Date
2019-09-03
Last Split Date
2022-07-05

Brickell 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 recent stock price disturbance, may contribute to short-term losses for the investors.

Moderna Price Channel

Brickell Biotech and Moderna Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Brickell Biotech and Moderna

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

Moderna

Pair trading matchups for Moderna

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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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