Correlation Between Salesforce and Moderna

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

Diversification Opportunities for Salesforce and Moderna

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Salesforce and Moderna is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Salesforce 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 Salesforce 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 Salesforce i.e., Salesforce and Moderna go up and down completely randomly.

Pair Corralation between Salesforce and Moderna

Considering the 90-day investment horizon Salesforce is expected to under-perform the Moderna. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.53 times less risky than Moderna. The stock trades about -0.08 of its potential returns per unit of risk. The Moderna is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  23,306  in Moderna on April 4, 2022 and sell it today you would lose (8,311)  from holding Moderna or give up 35.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Salesforce  vs.  Moderna

 Performance (%) 
      Timeline 
Salesforce 
Salesforce Performance
0 of 100
Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in August 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Structure and Payout Changes

Last Split Factor
4:1
Last Split Date
2013-04-18

Salesforce 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 latest sluggish performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Moderna Price Channel

Salesforce and Moderna Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Salesforce and Moderna

The main advantage of trading using opposite Salesforce and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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 Salesforce 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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