Correlation Between BioNTech and Nel ASA
Can any of the company-specific risk be diversified away by investing in both BioNTech and Nel ASA 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 Nel ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and Nel ASA, you can compare the effects of market volatilities on BioNTech and Nel ASA 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Nel ASA.
Diversification Opportunities for BioNTech and Nel ASA
Very good diversification
The 3 months correlation between BioNTech and Nel is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of BioNTech i.e., BioNTech and Nel ASA go up and down completely randomly.
Pair Corralation between BioNTech and Nel ASA
Assuming the 90 days trading horizon BioNTech SE is expected to generate 0.86 times more return on investment than Nel ASA. However, BioNTech SE is 1.17 times less risky than Nel ASA. It trades about 0.06 of its potential returns per unit of risk. Nel ASA is currently generating about -0.17 per unit of risk. If you would invest 9,230 in BioNTech SE on September 3, 2024 and sell it today you would earn a total of 2,020 from holding BioNTech SE or generate 21.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNTech SE vs. Nel ASA
Performance |
| Timeline |
| BioNTech SE |
| Nel ASA |
BioNTech and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and Nel ASA
The main advantage of trading using opposite BioNTech and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.The idea behind BioNTech SE and Nel ASA 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.| Nel ASA vs. SIEMENS AG SP | Nel ASA vs. Siemens Aktiengesellschaft | Nel ASA vs. Siemens Aktiengesellschaft | Nel ASA vs. Atlas Copco A |
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 Stocks Directory module to find actively traded stocks across global markets.
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