Correlation Between Intellia Therapeutics and Moderna

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

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

Diversification Opportunities for Intellia Therapeutics and Moderna

0.58

Correlation Coefficient

Intellia Therapeutics  Moderna

Very weak diversification

The 3 months correlation between Intellia and Moderna is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Intellia Therapeutics and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Intellia 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 Intellia 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 Intellia Therapeutics i.e., Intellia Therapeutics and Moderna go up and down completely randomly.

Pair Corralation between Intellia Therapeutics and Moderna

Given the investment horizon of 90 days Intellia Therapeutics is expected to under-perform the Moderna. But the stock apears to be less risky and, when comparing its historical volatility, Intellia Therapeutics is 1.08 times less risky than Moderna. The stock trades about -0.09 of its potential returns per unit of risk. The Moderna is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3,938  in Moderna on December 29, 2024 and sell it today you would lose (826.00) from holding Moderna or give up 20.98% of portfolio value over 90 days.

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

Intellia Therapeutics  vs.  Moderna

Intellia Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intellia Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Intellia Therapeutics and Moderna

The main advantage of trading using opposite Intellia Therapeutics and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intellia 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.

The idea behind Intellia 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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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.