Correlation Between BIONTECH and Alfa Holdings
Can any of the company-specific risk be diversified away by investing in both BIONTECH and Alfa Holdings 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 Alfa Holdings 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 Alfa Holdings SA, you can compare the effects of market volatilities on BIONTECH and Alfa Holdings 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 Alfa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Alfa Holdings.
Diversification Opportunities for BIONTECH and Alfa Holdings
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between BIONTECH and Alfa is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Alfa Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Holdings SA 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 Alfa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Holdings SA has no effect on the direction of BIONTECH i.e., BIONTECH and Alfa Holdings go up and down completely randomly.
Pair Corralation between BIONTECH and Alfa Holdings
Assuming the 90 days trading horizon BIONTECH SE DRN is expected to under-perform the Alfa Holdings. But the stock apears to be less risky and, when comparing its historical volatility, BIONTECH SE DRN is 1.0 times less risky than Alfa Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The Alfa Holdings SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 690.00 in Alfa Holdings SA on September 12, 2024 and sell it today you would earn a total of 219.00 from holding Alfa Holdings SA or generate 31.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
BIONTECH SE DRN vs. Alfa Holdings SA
Performance |
| Timeline |
| BIONTECH SE DRN |
| Alfa Holdings SA |
BIONTECH and Alfa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and Alfa Holdings
The main advantage of trading using opposite BIONTECH and Alfa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH position performs unexpectedly, Alfa Holdings 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 Alfa Holdings will offset losses from the drop in Alfa Holdings' long position.The idea behind BIONTECH SE DRN and Alfa Holdings SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Alfa Holdings vs. Ita Unibanco Holding | Alfa Holdings vs. Banco do Brasil | Alfa Holdings vs. Itasa Investimentos | Alfa Holdings vs. Petrleo Brasileiro SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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