Correlation Between Moderna and VF Corp

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

Diversification Opportunities for Moderna and VF Corp

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between Moderna and VF Corp is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and VF Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF Corp 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 VF Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corp has no effect on the direction of Moderna i.e., Moderna and VF Corp go up and down completely randomly.

Pair Corralation between Moderna and VF Corp

Given the investment horizon of 90 days Moderna is expected to generate 2.06 times more return on investment than VF Corp. However, Moderna is 2.06 times more volatile than VF Corp. It trades about 0.04 of its potential returns per unit of risk. VF Corp is currently generating about -0.07 per unit of risk. If you would invest  11,726  in Moderna on September 1, 2022 and sell it today you would earn a total of  5,254  from holding Moderna or generate 44.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Moderna  vs.  VF Corp

 Performance (%) 
       Timeline  
Moderna 
Moderna Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Moderna are ranked lower than 8 (%) 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

VF Corp 
VF Corp Performance
0 of 100
Over the last 90 days VF Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

VF Corp Price Channel

Moderna and VF Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Moderna and VF Corp

The main advantage of trading using opposite Moderna and VF Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, VF Corp 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 VF Corp will offset losses from the drop in VF Corp's long position.
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The idea behind Moderna and VF Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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