Correlation Between BioNTech and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both BioNTech and WUXI BIOLOGICS 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 BioNTech and WUXI BIOLOGICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on BioNTech and WUXI BIOLOGICS 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 BioNTech with a short position of WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and WUXI BIOLOGICS.
Diversification Opportunities for BioNTech and WUXI BIOLOGICS
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BioNTech and WUXI is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 and BioNTech 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 BioNTech SE are associated (or correlated) with WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of BioNTech i.e., BioNTech and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between BioNTech and WUXI BIOLOGICS
Assuming the 90 days trading horizon BioNTech is expected to generate 32.53 times less return on investment than WUXI BIOLOGICS. But when comparing it to its historical volatility, BioNTech SE is 1.55 times less risky than WUXI BIOLOGICS. It trades about 0.01 of its potential returns per unit of risk. WUXI BIOLOGICS UNSPADR2 is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 338.00 in WUXI BIOLOGICS UNSPADR2 on September 23, 2024 and sell it today you would earn a total of 80.00 from holding WUXI BIOLOGICS UNSPADR2 or generate 23.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNTech SE vs. WUXI BIOLOGICS UNSPADR2
Performance |
| Timeline |
| BioNTech SE |
| WUXI BIOLOGICS UNSPADR2 |
BioNTech and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and WUXI BIOLOGICS
The main advantage of trading using opposite BioNTech and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.The idea behind BioNTech SE and WUXI BIOLOGICS UNSPADR2 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.| WUXI BIOLOGICS vs. COFCO Joycome Foods | WUXI BIOLOGICS vs. LIFEWAY FOODS | WUXI BIOLOGICS vs. INTER CARS SA | WUXI BIOLOGICS vs. Cal Maine Foods |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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