Correlation Between Eupraxia Pharmaceuticals and Moderna

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

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

Diversification Opportunities for Eupraxia Pharmaceuticals and Moderna

-0.74

Correlation Coefficient

Eupraxia Pharmaceuticals  Moderna

Pay attention - limited upside

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

Pair Corralation between Eupraxia Pharmaceuticals and Moderna

Assuming the 90 days horizon Eupraxia Pharmaceuticals is expected to under-perform the Moderna. In addition to that, Eupraxia Pharmaceuticals is 1.76 times more volatile than Moderna. It trades about -0.07 of its total potential returns per unit of risk. Moderna is currently generating about 0.04 per unit of volatility. If you would invest  10,741  in Moderna on January 26, 2024 and sell it today you would earn a total of  144.00  from holding Moderna or generate 1.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Eupraxia Pharmaceuticals  vs.  Moderna

Eupraxia Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eupraxia Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Moderna

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Moderna are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Moderna may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Eupraxia Pharmaceuticals and Moderna

The main advantage of trading using opposite Eupraxia Pharmaceuticals and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eupraxia Pharmaceuticals 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 Eupraxia Pharmaceuticals 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.