Correlation Between AN2 Therapeutics and Moderna

Can any of the company-specific risk be diversified away by investing in both AN2 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 AN2 Therapeutics and Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AN2 Therapeutics and Moderna, you can compare the effects of market volatilities on AN2 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 AN2 Therapeutics with a short position of Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of AN2 Therapeutics and Moderna.

Diversification Opportunities for AN2 Therapeutics and Moderna

-0.74

Correlation Coefficient

AN2 Therapeutics  Moderna

Pay attention - limited upside

The 3 months correlation between AN2 and Moderna is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding AN2 Therapeutics and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and AN2 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 AN2 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 AN2 Therapeutics i.e., AN2 Therapeutics and Moderna go up and down completely randomly.

Pair Corralation between AN2 Therapeutics and Moderna

Given the investment horizon of 90 days AN2 Therapeutics is expected to under-perform the Moderna. But the stock apears to be less risky and, when comparing its historical volatility, AN2 Therapeutics is 1.83 times less risky than Moderna. The stock trades about -0.3 of its potential returns per unit of risk. The Moderna is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  12,567  in Moderna on March 13, 2024 and sell it today you would earn a total of  2,292  from holding Moderna or generate 18.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

AN2 Therapeutics  vs.  Moderna

AN2 Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AN2 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Moderna

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Moderna are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Moderna sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AN2 Therapeutics and Moderna

The main advantage of trading using opposite AN2 Therapeutics and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AN2 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 AN2 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .