Correlation Between Zoom Video and BioNTech
Can any of the company-specific risk be diversified away by investing in both Zoom Video and BioNTech 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 Zoom Video and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zoom Video Communications and BioNTech SE, you can compare the effects of market volatilities on Zoom Video and BioNTech 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 Zoom Video with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and BioNTech.
Diversification Opportunities for Zoom Video and BioNTech
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zoom and BioNTech is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Zoom Video 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 Zoom Video Communications are associated (or correlated) with BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Zoom Video i.e., Zoom Video and BioNTech go up and down completely randomly.
Pair Corralation between Zoom Video and BioNTech
Assuming the 90 days trading horizon Zoom Video is expected to generate 1.47 times less return on investment than BioNTech. But when comparing it to its historical volatility, Zoom Video Communications is 1.38 times less risky than BioNTech. It trades about 0.03 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,043 in BioNTech SE on September 4, 2024 and sell it today you would earn a total of 1,738 from holding BioNTech SE or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Zoom Video Communications vs. BioNTech SE
Performance |
| Timeline |
| Zoom Video Communications |
| BioNTech SE |
Zoom Video and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and BioNTech
The main advantage of trading using opposite Zoom Video and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, BioNTech 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 BioNTech will offset losses from the drop in BioNTech's long position.| Zoom Video vs. Enbridge | Zoom Video vs. Endo International PLC | Zoom Video vs. State Street Corp | Zoom Video vs. DXC Technology Co |
| BioNTech vs. Empire Metals Limited | BioNTech vs. Take Two Interactive Software | BioNTech vs. Science in Sport | BioNTech vs. Ocean Harvest Technology |
Check out your portfolio center.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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