Correlation Between BioNTech and DAIDO METAL

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Can any of the company-specific risk be diversified away by investing in both BioNTech and DAIDO METAL 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 DAIDO METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and DAIDO METAL TD, you can compare the effects of market volatilities on BioNTech and DAIDO METAL 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 DAIDO METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and DAIDO METAL.

Diversification Opportunities for BioNTech and DAIDO METAL

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between BioNTech and DAIDO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and DAIDO METAL TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIDO METAL TD 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 DAIDO METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIDO METAL TD has no effect on the direction of BioNTech i.e., BioNTech and DAIDO METAL go up and down completely randomly.

Pair Corralation between BioNTech and DAIDO METAL

Assuming the 90 days trading horizon BioNTech SE is expected to generate 2.15 times more return on investment than DAIDO METAL. However, BioNTech is 2.15 times more volatile than DAIDO METAL TD. It trades about 0.01 of its potential returns per unit of risk. DAIDO METAL TD is currently generating about -0.23 per unit of risk. If you would invest  11,000  in BioNTech SE on October 25, 2024 and sell it today you would earn a total of  0.00  from holding BioNTech SE or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

BioNTech SE  vs.  DAIDO METAL TD

 Performance 
       Timeline  
BioNTech SE 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.
DAIDO METAL TD 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in DAIDO METAL TD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DAIDO METAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

BioNTech and DAIDO METAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BioNTech and DAIDO METAL

The main advantage of trading using opposite BioNTech and DAIDO METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, DAIDO METAL 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 DAIDO METAL will offset losses from the drop in DAIDO METAL's long position.
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The idea behind BioNTech SE and DAIDO METAL TD 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.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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