Correlation Between BIONTECH and Ares Management
Can any of the company-specific risk be diversified away by investing in both BIONTECH and Ares Management 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 Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIONTECH SE DRN and Ares Management, you can compare the effects of market volatilities on BIONTECH and Ares Management 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 Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Ares Management.
Diversification Opportunities for BIONTECH and Ares Management
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BIONTECH and Ares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Ares Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management 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 DRN are associated (or correlated) with Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management has no effect on the direction of BIONTECH i.e., BIONTECH and Ares Management go up and down completely randomly.
Pair Corralation between BIONTECH and Ares Management
Assuming the 90 days trading horizon BIONTECH SE DRN is expected to generate 1.76 times more return on investment than Ares Management. However, BIONTECH is 1.76 times more volatile than Ares Management. It trades about 0.11 of its potential returns per unit of risk. Ares Management is currently generating about 0.17 per unit of risk. If you would invest 2,820 in BIONTECH SE DRN on October 17, 2024 and sell it today you would earn a total of 1,410 from holding BIONTECH SE DRN or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIONTECH SE DRN vs. Ares Management
Performance |
| Timeline |
| BIONTECH SE DRN |
| Ares Management |
BIONTECH and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and Ares Management
The main advantage of trading using opposite BIONTECH and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH position performs unexpectedly, Ares Management 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 Ares Management will offset losses from the drop in Ares Management's long position.| BIONTECH vs. Monster Beverage | BIONTECH vs. Academy Sports and | BIONTECH vs. Warner Music Group | BIONTECH vs. Ares Management |
| Ares Management vs. BIONTECH SE DRN | Ares Management vs. Nordon Indstrias Metalrgicas | Ares Management vs. JB Hunt Transport | Ares Management vs. Roper Technologies, |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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