Correlation Between American Airlines and BIONTECH
Can any of the company-specific risk be diversified away by investing in both American Airlines 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 American Airlines and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Airlines Group and BIONTECH SE DRN, you can compare the effects of market volatilities on American Airlines 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 American Airlines with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and BIONTECH.
Diversification Opportunities for American Airlines and BIONTECH
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and BIONTECH is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN and American Airlines 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 American Airlines Group 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 DRN has no effect on the direction of American Airlines i.e., American Airlines and BIONTECH go up and down completely randomly.
Pair Corralation between American Airlines and BIONTECH
Assuming the 90 days trading horizon American Airlines Group is expected to under-perform the BIONTECH. But the stock apears to be less risky and, when comparing its historical volatility, American Airlines Group is 1.41 times less risky than BIONTECH. The stock trades about -0.33 of its potential returns per unit of risk. The BIONTECH SE DRN is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 4,423 in BIONTECH SE DRN on November 27, 2024 and sell it today you would lose (188.00) from holding BIONTECH SE DRN or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. BIONTECH SE DRN
Performance |
| Timeline |
| American Airlines |
| BIONTECH SE DRN |
American Airlines and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and BIONTECH
The main advantage of trading using opposite American Airlines and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines 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.| American Airlines vs. Caesars Entertainment, | American Airlines vs. Deutsche Bank Aktiengesellschaft | American Airlines vs. ICICI Bank Limited | American Airlines vs. NXP Semiconductors NV |
| BIONTECH vs. Live Nation Entertainment, | BIONTECH vs. Warner Music Group | BIONTECH vs. Darden Restaurants, | BIONTECH vs. Caesars Entertainment, |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |