Correlation Between Omega Therapeutics and Moderna

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

Diversification Opportunities for Omega Therapeutics and Moderna

  Correlation Coefficient

Very good diversification

The 3 months correlation between Omega and Moderna is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Omega Therapeutics and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Omega Therapeutics 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 Omega Therapeutics 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 Omega Therapeutics i.e., Omega Therapeutics and Moderna go up and down completely randomly.

Pair Corralation between Omega Therapeutics and Moderna

Given the investment horizon of 90 days Omega Therapeutics is expected to generate 1.97 times more return on investment than Moderna. However, Omega Therapeutics is 1.97 times more volatile than Moderna. It trades about 0.01 of its potential returns per unit of risk. Moderna is currently generating about -0.09 per unit of risk. If you would invest  518.00  in Omega Therapeutics on July 6, 2022 and sell it today you would lose (16.00)  from holding Omega Therapeutics or give up 3.09% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
ValuesDaily Returns

Omega Therapeutics  vs.  Moderna

 Performance (%) 
Omega Therapeutics 
Omega Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Omega Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Omega Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Omega Price Channel

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Moderna Price Channel

Omega Therapeutics and Moderna Volatility Contrast

   Predicted Return Density   

Pair Trading with Omega Therapeutics and Moderna

The main advantage of trading using opposite Omega Therapeutics and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omega Therapeutics 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.
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The idea behind Omega Therapeutics 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.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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