Correlation Between Betterware and Moderna

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

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

Diversification Opportunities for Betterware and Moderna

0.66

Correlation Coefficient

Betterware  Moderna

Poor diversification

The 3 months correlation between Betterware and Moderna is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Betterware De Mexico and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna and Betterware 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 Betterware De Mexico 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 Betterware i.e., Betterware and Moderna go up and down completely randomly.

Pair Corralation between Betterware and Moderna

Given the investment horizon of 90 days Betterware De Mexico is expected to under-perform the Moderna. In addition to that, Betterware is 1.31 times more volatile than Moderna. It trades about -0.04 of its total potential returns per unit of risk. Moderna is currently generating about 0.14 per unit of volatility. If you would invest  9,600  in Moderna on February 1, 2024 and sell it today you would earn a total of  1,431  from holding Moderna or generate 14.91% return on investment over 90 days.

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

Betterware De Mexico  vs.  Moderna

Betterware De Mexico

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Betterware De Mexico are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Betterware showed solid returns over the last few months and may actually be approaching a breakup point.

Moderna

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Moderna are ranked lower than 5 (%) 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 Betterware and Moderna

The main advantage of trading using opposite Betterware and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betterware 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 Betterware De Mexico 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.