Correlation Between Moderna and Regeneron Pharmaceuticals

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

Diversification Opportunities for Moderna and Regeneron Pharmaceuticals

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Moderna and Regeneron is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regeneron Pharmaceuticals has no effect on the direction of Moderna i.e., Moderna and Regeneron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Moderna and Regeneron Pharmaceuticals

Given the investment horizon of 90 days Moderna is expected to generate 2.62 times more return on investment than Regeneron Pharmaceuticals. However, Moderna is 2.62 times more volatile than Regeneron Pharmaceuticals. It trades about 0.05 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest  7,104  in Moderna on June 28, 2022 and sell it today you would earn a total of  4,998  from holding Moderna or generate 70.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Moderna  vs.  Regeneron Pharmaceuticals

 Performance (%) 
       Timeline  
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 abnormal 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

Regeneron Pharmaceuticals 
Regeneron Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Regeneron Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal technical and fundamental indicators, Regeneron Pharmaceuticals disclosed solid returns over the last few months and may actually be approaching a breakup point.

Regeneron Price Channel

Moderna and Regeneron Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Moderna and Regeneron Pharmaceuticals

The main advantage of trading using opposite Moderna and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals will offset losses from the drop in Regeneron Pharmaceuticals' long position.
Moderna vs. Clearwater Paper Corp
The idea behind Moderna and Regeneron Pharmaceuticals 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.
Regeneron Pharmaceuticals vs. Clearwater Paper Corp
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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