Correlation Between BioNTech and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both BioNTech and Diamyd Medical 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 Diamyd Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and Diamyd Medical AB, you can compare the effects of market volatilities on BioNTech and Diamyd Medical 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 Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Diamyd Medical.
Diversification Opportunities for BioNTech and Diamyd Medical
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BioNTech and Diamyd is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB 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 Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of BioNTech i.e., BioNTech and Diamyd Medical go up and down completely randomly.
Pair Corralation between BioNTech and Diamyd Medical
Assuming the 90 days trading horizon BioNTech SE is expected to generate 1.14 times more return on investment than Diamyd Medical. However, BioNTech is 1.14 times more volatile than Diamyd Medical AB. It trades about 0.0 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about -0.13 per unit of risk. If you would invest 10,440 in BioNTech SE on August 25, 2024 and sell it today you would lose (140.00) from holding BioNTech SE or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNTech SE vs. Diamyd Medical AB
Performance |
| Timeline |
| BioNTech SE |
| Diamyd Medical AB |
BioNTech and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and Diamyd Medical
The main advantage of trading using opposite BioNTech and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Diamyd Medical 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.The idea behind BioNTech SE and Diamyd Medical AB 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.| Diamyd Medical vs. ASPEN TECHINC DL | Diamyd Medical vs. REGAL ASIAN INVESTMENTS | Diamyd Medical vs. Sunny Optical Technology | Diamyd Medical vs. CapitaLand Investment Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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