Correlation Between BIONTECH and Trane Technologies
Can any of the company-specific risk be diversified away by investing in both BIONTECH and Trane Technologies 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 Trane Technologies 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 Trane Technologies plc, you can compare the effects of market volatilities on BIONTECH and Trane Technologies 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 Trane Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Trane Technologies.
Diversification Opportunities for BIONTECH and Trane Technologies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BIONTECH and Trane is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Trane Technologies plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trane Technologies plc 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 Trane Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trane Technologies plc has no effect on the direction of BIONTECH i.e., BIONTECH and Trane Technologies go up and down completely randomly.
Pair Corralation between BIONTECH and Trane Technologies
Assuming the 90 days trading horizon BIONTECH is expected to generate 3.75 times less return on investment than Trane Technologies. In addition to that, BIONTECH is 1.24 times more volatile than Trane Technologies plc. It trades about 0.03 of its total potential returns per unit of risk. Trane Technologies plc is currently generating about 0.12 per unit of volatility. If you would invest 48,370 in Trane Technologies plc on October 16, 2024 and sell it today you would earn a total of 67,001 from holding Trane Technologies plc or generate 138.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.14% |
| Values | Daily Returns |
BIONTECH SE DRN vs. Trane Technologies plc
Performance |
| Timeline |
| BIONTECH SE DRN |
| Trane Technologies plc |
BIONTECH and Trane Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and Trane Technologies
The main advantage of trading using opposite BIONTECH and Trane Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH position performs unexpectedly, Trane Technologies 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 Trane Technologies will offset losses from the drop in Trane Technologies' long position.| BIONTECH vs. Take Two Interactive Software | BIONTECH vs. DXC Technology | BIONTECH vs. Unity Software | BIONTECH vs. Hospital Mater Dei |
| Trane Technologies vs. Liberty Broadband | Trane Technologies vs. Zebra Technologies | Trane Technologies vs. BIONTECH SE DRN | Trane Technologies vs. Bio Techne |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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