Should you exit your Moderna (NASDAQ:MRNA) position after the current rise?

Moderna is currently does not generate positive expected returns and assumes 5.4668% risk (volatility on return distribution) over the 90 days horizon. While many risk-averse investors are getting carried away by overanalyzing healthcare space, it is reasonable to go over Moderna. We will cover the possibilities of Moderna's current volatility to continue through December.
Published over a year ago
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Reviewed by Rifka Kats

The company currently holds 603 M in liabilities with Debt to Equity (D/E) ratio of 0.09, which may suggest Moderna is not taking enough advantage from borrowing. Moderna has a current ratio of 1.22, suggesting that it may not be capable to disburse its financial obligations when due.
The company secures a Beta (Market Risk) of -0.4852, which conveys possible diversification benefits within a given portfolio. Let's try to break down what Moderna's beta means in this case. As returns on the market increase, returns on owning Moderna are expected to decrease at a much lower rate. During the bear market, Moderna is likely to outperform the market. Even though it is essential to pay attention to Moderna price patterns, it is always good to be careful when utilizing equity historical price patterns. Our philosophy towards estimating any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Moderna exposes twenty-eight different technical indicators, which can help you to evaluate its performance. Moderna has an expected return of -0.0362%. Please be advised to verify Moderna coefficient of variation, maximum drawdown, skewness, as well as the relationship between the total risk alpha and downside variance to decide if Moderna performance from the past will be repeated at some point in the near future.
Volatility is a rate at which the price of Moderna or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Moderna may increase or decrease. In other words, similar to Moderna's beta indicator, it measures the risk of Moderna and helps estimate the fluctuations that may happen in a short period of time. So if prices of Moderna fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is Moderna's Liquidity

Moderna financial leverage refers to using borrowed capital as a funding source to finance Moderna ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Moderna financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Moderna's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Moderna's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Moderna's total debt and its cash.

Moderna Gross Profit

Moderna Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Moderna previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Moderna Gross Profit growth over the last 10 years. Please check Moderna's gross profit and other fundamental indicators for more details.

Moderna Volatility Drivers

Moderna unsystematic risk is unique to Moderna and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Moderna you can also buy Vertex Pharmaceuticals. You can also mitigate this risk by investing in the health care sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Moderna important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Moderna income statement and balance sheet. Here are more details about Moderna volatility.
0.91-0.98-0.810.44-0.940.910.860.460.97-0.4-0.4-0.62-0.06-0.610.74-0.730.98-0.1-0.780.110.110.91
0.91-0.83-0.960.16-0.760.890.890.650.79-0.11-0.11-0.420.16-0.560.59-0.840.880.18-0.880.040.130.89
-0.98-0.830.74-0.550.99-0.89-0.82-0.39-1.00.510.510.70.170.54-0.770.63-0.970.170.68-0.09-0.02-0.84
-0.81-0.960.74-0.120.67-0.78-0.81-0.64-0.690.060.060.38-0.140.53-0.530.77-0.8-0.110.81-0.09-0.1-0.8
0.440.16-0.55-0.12-0.610.11-0.01-0.530.6-0.47-0.47-0.44-0.91-0.330.25-0.180.38-0.76-0.190.110.080.45
-0.94-0.760.990.67-0.61-0.84-0.77-0.33-0.990.580.580.750.240.51-0.790.55-0.940.250.59-0.10.03-0.77
0.910.89-0.89-0.780.11-0.840.980.750.85-0.34-0.34-0.60.3-0.450.77-0.650.940.23-0.70.01-0.050.74
0.860.89-0.82-0.81-0.01-0.770.980.840.78-0.26-0.26-0.540.41-0.40.74-0.630.890.27-0.68-0.02-0.080.69
0.460.65-0.39-0.64-0.53-0.330.750.840.320.040.04-0.250.8-0.10.48-0.410.530.63-0.43-0.12-0.20.3
0.970.79-1.0-0.690.6-0.990.850.780.32-0.53-0.53-0.7-0.23-0.550.76-0.610.95-0.24-0.650.10.030.84
-0.4-0.110.510.06-0.470.58-0.34-0.260.04-0.531.00.680.30.33-0.79-0.22-0.530.4-0.18-0.620.03-0.08
-0.4-0.110.510.06-0.470.58-0.34-0.260.04-0.531.00.680.30.33-0.79-0.22-0.530.4-0.18-0.620.03-0.08
-0.62-0.420.70.38-0.440.75-0.6-0.54-0.25-0.70.680.680.160.33-0.740.33-0.720.230.31-0.270.32-0.33
-0.060.160.17-0.14-0.910.240.30.410.8-0.230.30.30.160.180.06-0.060.00.79-0.07-0.16-0.16-0.15
-0.61-0.560.540.53-0.330.51-0.45-0.4-0.1-0.550.330.330.330.18-0.590.51-0.60.260.57-0.64-0.76-0.57
0.740.59-0.77-0.530.25-0.790.770.740.480.76-0.79-0.79-0.740.06-0.59-0.220.84-0.09-0.280.510.110.41
-0.73-0.840.630.77-0.180.55-0.65-0.63-0.41-0.61-0.22-0.220.33-0.060.51-0.22-0.64-0.170.990.14-0.14-0.86
0.980.88-0.97-0.80.38-0.940.940.890.530.95-0.53-0.53-0.720.0-0.60.84-0.64-0.07-0.690.220.040.81
-0.10.180.17-0.11-0.760.250.230.270.63-0.240.40.40.230.790.26-0.09-0.17-0.07-0.16-0.32-0.14-0.11
-0.78-0.880.680.81-0.190.59-0.7-0.68-0.43-0.65-0.18-0.180.31-0.070.57-0.280.99-0.69-0.160.1-0.21-0.89
0.110.04-0.09-0.090.11-0.10.01-0.02-0.120.1-0.62-0.62-0.27-0.16-0.640.510.140.22-0.320.10.5-0.04
0.110.13-0.02-0.10.080.03-0.05-0.08-0.20.030.030.030.32-0.16-0.760.11-0.140.04-0.14-0.210.50.21
0.910.89-0.84-0.80.45-0.770.740.690.30.84-0.08-0.08-0.33-0.15-0.570.41-0.860.81-0.11-0.89-0.040.21
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Breaking it down a bit more

The small slip in market price for the last few months may encourage investors to take a closer look at the firm as it is trading at a share price of 329.63 on 35,901,209 in trading volume. The company directors and management did not add much value to Moderna investors in October. However, diversifying your holdings with Moderna or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 5.47. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Moderna partners.

Will Moderna current rise continue?

Treynor ratio is down to 0.93. It may suggest a possible volatility slip. Moderna exhibits very low volatility with skewness of -1.48 and kurtosis of 3.66. However, we advise investors to further study Moderna technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Moderna's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Moderna's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Moderna Implied Volatility

Moderna's implied volatility exposes the market's sentiment of Moderna stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Moderna's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Moderna stock will not fluctuate a lot when Moderna's options are near their expiration.

When is the right time to buy or sell Moderna? Buying stocks such as Moderna isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
The inconsistency in the assessment between current Moderna valuation and our trade advice on Moderna is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Moderna.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Moderna. Please refer to our Terms of Use for any information regarding our disclosure principles.

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