Correlation Between Ocean Biomedical and Moderna

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

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

Diversification Opportunities for Ocean Biomedical and Moderna

0.68

Correlation Coefficient

Ocean Biomedical  Moderna

Poor diversification

The 3 months correlation between Ocean and Moderna is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Biomedical and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Ocean Biomedical 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 Ocean Biomedical 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 Ocean Biomedical i.e., Ocean Biomedical and Moderna go up and down completely randomly.

Pair Corralation between Ocean Biomedical and Moderna

Given the investment horizon of 90 days Ocean Biomedical is expected to under-perform the Moderna. In addition to that, Ocean Biomedical is 1.99 times more volatile than Moderna. It trades about -0.26 of its total potential returns per unit of risk. Moderna is currently generating about -0.06 per unit of volatility. If you would invest  4,306  in Moderna on November 28, 2024 and sell it today you would lose (978.00) from holding Moderna or give up 22.71% of portfolio value over 90 days.

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

Ocean Biomedical  vs.  Moderna

Ocean Biomedical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ocean Biomedical 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in March 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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ocean Biomedical and Moderna

The main advantage of trading using opposite Ocean Biomedical and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Biomedical 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 Ocean Biomedical 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.