Correlation Between BIONTECH and Western Union
Can any of the company-specific risk be diversified away by investing in both BIONTECH and Western Union 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 Western Union 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 The Western Union, you can compare the effects of market volatilities on BIONTECH and Western Union 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 Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Western Union.
Diversification Opportunities for BIONTECH and Western Union
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BIONTECH and Western is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and The Western Union in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union 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 Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of BIONTECH i.e., BIONTECH and Western Union go up and down completely randomly.
Pair Corralation between BIONTECH and Western Union
Assuming the 90 days trading horizon BIONTECH SE DRN is expected to generate 5.32 times more return on investment than Western Union. However, BIONTECH is 5.32 times more volatile than The Western Union. It trades about 0.16 of its potential returns per unit of risk. The Western Union is currently generating about 0.29 per unit of risk. If you would invest 4,000 in BIONTECH SE DRN on September 4, 2024 and sell it today you would earn a total of 446.00 from holding BIONTECH SE DRN or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
BIONTECH SE DRN vs. The Western Union
Performance |
| Timeline |
| BIONTECH SE DRN |
| Western Union |
BIONTECH and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and Western Union
The main advantage of trading using opposite BIONTECH and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.| BIONTECH vs. Vertex Pharmaceuticals Incorporated | BIONTECH vs. Moderna | BIONTECH vs. BeiGene | BIONTECH vs. Bio Techne |
| Western Union vs. Warner Music Group | Western Union vs. Bio Techne | Western Union vs. BIONTECH SE DRN | Western Union vs. Palantir 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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