Correlation Between Moderna and Crispr Therapeutics

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

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

Diversification Opportunities for Moderna and Crispr Therapeutics

-0.21

Correlation Coefficient

Moderna  Crispr Therapeutics

Very good diversification

The 3 months correlation between Moderna and Crispr is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Moderna and Crispr Therapeutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crispr Therapeutics 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 Crispr Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crispr Therapeutics has no effect on the direction of Moderna i.e., Moderna and Crispr Therapeutics go up and down completely randomly.

Pair Corralation between Moderna and Crispr Therapeutics

Given the investment horizon of 90 days Moderna is expected to under-perform the Crispr Therapeutics. In addition to that, Moderna is 1.47 times more volatile than Crispr Therapeutics AG. It trades about -0.04 of its total potential returns per unit of risk. Crispr Therapeutics AG is currently generating about 0.0 per unit of volatility. If you would invest  3,865  in Crispr Therapeutics AG on December 29, 2024 and sell it today you would lose (166.00) from holding Crispr Therapeutics AG or give up 4.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Moderna  vs.  Crispr Therapeutics AG

Moderna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moderna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady 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.

Crispr Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crispr Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crispr Therapeutics is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Moderna and Crispr Therapeutics

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

The idea behind Moderna and Crispr Therapeutics 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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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.