Correlation Between Powercell Sweden and BioNTech
Can any of the company-specific risk be diversified away by investing in both Powercell Sweden 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 Powercell Sweden and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powercell Sweden and BioNTech SE, you can compare the effects of market volatilities on Powercell Sweden 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 Powercell Sweden with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powercell Sweden and BioNTech.
Diversification Opportunities for Powercell Sweden and BioNTech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Powercell and BioNTech is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Powercell Sweden and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Powercell Sweden 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 Powercell Sweden 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 Powercell Sweden i.e., Powercell Sweden and BioNTech go up and down completely randomly.
Pair Corralation between Powercell Sweden and BioNTech
Assuming the 90 days horizon Powercell Sweden is expected to generate 4.0 times less return on investment than BioNTech. In addition to that, Powercell Sweden is 1.53 times more volatile than BioNTech SE. It trades about 0.01 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.04 per unit of volatility. If you would invest 9,172 in BioNTech SE on October 11, 2024 and sell it today you would earn a total of 2,678 from holding BioNTech SE or generate 29.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Powercell Sweden vs. BioNTech SE
Performance |
| Timeline |
| Powercell Sweden |
| BioNTech SE |
Powercell Sweden and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powercell Sweden and BioNTech
The main advantage of trading using opposite Powercell Sweden and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powercell Sweden 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.| Powercell Sweden vs. Boyd Gaming | Powercell Sweden vs. Entravision Communications | Powercell Sweden vs. Scientific Games | Powercell Sweden vs. CONTAGIOUS GAMING INC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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