Correlation Between BIONTECH and British American
Can any of the company-specific risk be diversified away by investing in both BIONTECH and British American 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 British American 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 British American Tobacco, you can compare the effects of market volatilities on BIONTECH and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and British American.
Diversification Opportunities for BIONTECH and British American
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BIONTECH and British is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of BIONTECH i.e., BIONTECH and British American go up and down completely randomly.
Pair Corralation between BIONTECH and British American
Assuming the 90 days trading horizon BIONTECH SE DRN is expected to generate 1.13 times more return on investment than British American. However, BIONTECH is 1.13 times more volatile than British American Tobacco. It trades about -0.08 of its potential returns per unit of risk. British American Tobacco is currently generating about -0.12 per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIONTECH SE DRN vs. British American Tobacco
Performance |
| Timeline |
| BIONTECH SE DRN |
| British American Tobacco |
BIONTECH and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and British American
The main advantage of trading using opposite BIONTECH and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| BIONTECH vs. Live Nation Entertainment, | BIONTECH vs. Warner Music Group | BIONTECH vs. Darden Restaurants, | BIONTECH vs. Caesars Entertainment, |
| British American vs. GP Investments | British American vs. Broadridge Financial Solutions, | British American vs. Fair Isaac | British American vs. CVS Health |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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