Correlation Between Moderna and IBEX Technologies

Can any of the company-specific risk be diversified away by investing in both Moderna and IBEX Technologies 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 IBEX Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moderna and IBEX Technologies, you can compare the effects of market volatilities on Moderna and IBEX Technologies 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 IBEX Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderna and IBEX Technologies.

Diversification Opportunities for Moderna and IBEX Technologies

-0.46

Correlation Coefficient

Moderna  IBEX Technologies

Very good diversification

The 3 months correlation between Moderna and IBEX is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and IBEX Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX Technologies 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 IBEX Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX Technologies has no effect on the direction of Moderna i.e., Moderna and IBEX Technologies go up and down completely randomly.

Pair Corralation between Moderna and IBEX Technologies

Assuming the 90 days horizon Moderna is expected to generate 2.6 times more return on investment than IBEX Technologies. However, Moderna is 2.6 times more volatile than IBEX Technologies. It trades about 0.05 of its potential returns per unit of risk. IBEX Technologies is currently generating about 0.03 per unit of risk. If you would invest  3,612  in Moderna on September 22, 2024 and sell it today you would earn a total of  83.00  from holding Moderna or generate 2.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Moderna  vs.  IBEX Technologies

Moderna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

IBEX Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IBEX Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Moderna and IBEX Technologies

The main advantage of trading using opposite Moderna and IBEX Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderna position performs unexpectedly, IBEX Technologies 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 IBEX Technologies will offset losses from the drop in IBEX Technologies' long position.

The idea behind Moderna and IBEX Technologies 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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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 the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.