Correlation Between BIONTECH and Livetech
Can any of the company-specific risk be diversified away by investing in both BIONTECH and Livetech 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 Livetech 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 Livetech da Bahia, you can compare the effects of market volatilities on BIONTECH and Livetech 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 Livetech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Livetech.
Diversification Opportunities for BIONTECH and Livetech
Good diversification
The 3 months correlation between BIONTECH and Livetech is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia 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 Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of BIONTECH i.e., BIONTECH and Livetech go up and down completely randomly.
Pair Corralation between BIONTECH and Livetech
Assuming the 90 days trading horizon BIONTECH SE DRN is expected to generate 0.91 times more return on investment than Livetech. However, BIONTECH SE DRN is 1.09 times less risky than Livetech. It trades about 0.0 of its potential returns per unit of risk. Livetech da Bahia is currently generating about -0.02 per unit of risk. If you would invest 5,592 in BIONTECH SE DRN on August 30, 2024 and sell it today you would lose (1,117) from holding BIONTECH SE DRN or give up 19.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
BIONTECH SE DRN vs. Livetech da Bahia
Performance |
| Timeline |
| BIONTECH SE DRN |
| Livetech da Bahia |
BIONTECH and Livetech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and Livetech
The main advantage of trading using opposite BIONTECH and Livetech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH position performs unexpectedly, Livetech 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 Livetech will offset losses from the drop in Livetech's long position.| BIONTECH vs. Southwest Airlines Co | BIONTECH vs. Micron Technology | BIONTECH vs. Charter Communications | BIONTECH vs. Verizon Communications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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