Correlation Between AJ Bell and BioNTech
Can any of the company-specific risk be diversified away by investing in both AJ Bell 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 AJ Bell and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Bell plc and BioNTech SE, you can compare the effects of market volatilities on AJ Bell 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 AJ Bell with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Bell and BioNTech.
Diversification Opportunities for AJ Bell and BioNTech
Significant diversification
The 3 months correlation between AJB and BioNTech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AJ Bell plc and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and AJ Bell 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 AJ Bell plc 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 AJ Bell i.e., AJ Bell and BioNTech go up and down completely randomly.
Pair Corralation between AJ Bell and BioNTech
Assuming the 90 days trading horizon AJ Bell plc is expected to generate 0.76 times more return on investment than BioNTech. However, AJ Bell plc is 1.31 times less risky than BioNTech. It trades about 0.04 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.02 per unit of risk. If you would invest 33,742 in AJ Bell plc on September 12, 2024 and sell it today you would earn a total of 13,908 from holding AJ Bell plc or generate 41.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.42% |
| Values | Daily Returns |
AJ Bell plc vs. BioNTech SE
Performance |
| Timeline |
| AJ Bell plc |
| BioNTech SE |
AJ Bell and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Bell and BioNTech
The main advantage of trading using opposite AJ Bell and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Bell 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.| AJ Bell vs. BioNTech SE | AJ Bell vs. Raytheon Technologies Corp | AJ Bell vs. Concurrent Technologies Plc | AJ Bell vs. Roper Technologies |
| BioNTech vs. Mulberry Group PLC | BioNTech vs. Ikigai Ventures | BioNTech vs. Neometals | BioNTech vs. Coor Service Management |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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