Correlation Between Moderna and Deutsche Brse

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

Diversification Opportunities for Moderna and Deutsche Brse

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Moderna and Deutsche is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Deutsche Brse AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Brse AG 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 Deutsche Brse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Brse AG has no effect on the direction of Moderna i.e., Moderna and Deutsche Brse go up and down completely randomly.

Pair Corralation between Moderna and Deutsche Brse

Given the investment horizon of 90 days Moderna is expected to under-perform the Deutsche Brse. In addition to that, Moderna is 1.44 times more volatile than Deutsche Brse AG. It trades about -0.02 of its total potential returns per unit of risk. Deutsche Brse AG is currently generating about 0.04 per unit of volatility. If you would invest  15,651  in Deutsche Brse AG on September 4, 2022 and sell it today you would earn a total of  3,212  from holding Deutsche Brse AG or generate 20.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.6%
ValuesDaily Returns

Moderna  vs.  Deutsche Brse AG

 Performance (%) 
       Timeline  
Moderna 
Moderna Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Moderna are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Moderna sustained solid returns over the last few months and may actually be approaching a breakup point.

Moderna Price Channel

Deutsche Brse AG 
Deutsche Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Brse AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Deutsche Brse exhibited solid returns over the last few months and may actually be approaching a breakup point.

Deutsche Price Channel

Moderna and Deutsche Brse Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Moderna and Deutsche Brse

The main advantage of trading using opposite Moderna and Deutsche Brse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, Deutsche Brse 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 Deutsche Brse will offset losses from the drop in Deutsche Brse's long position.
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The idea behind Moderna and Deutsche Brse AG 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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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 Global Correlations module to find global opportunities by holding instruments from different markets.

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