Correlation Between BioNTech and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both BioNTech and Arrow Electronics 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 Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and Arrow Electronics, you can compare the effects of market volatilities on BioNTech and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Arrow Electronics.
Diversification Opportunities for BioNTech and Arrow Electronics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BioNTech and Arrow is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of BioNTech i.e., BioNTech and Arrow Electronics go up and down completely randomly.
Pair Corralation between BioNTech and Arrow Electronics
Given the investment horizon of 90 days BioNTech SE is expected to generate 1.6 times more return on investment than Arrow Electronics. However, BioNTech is 1.6 times more volatile than Arrow Electronics. It trades about 0.02 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.01 per unit of risk. If you would invest 10,897 in BioNTech SE on August 31, 2024 and sell it today you would earn a total of 942.00 from holding BioNTech SE or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNTech SE vs. Arrow Electronics
Performance |
| Timeline |
| BioNTech SE |
| Arrow Electronics |
BioNTech and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and Arrow Electronics
The main advantage of trading using opposite BioNTech and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| BioNTech vs. Cue Biopharma | BioNTech vs. Eliem Therapeutics | BioNTech vs. Inhibrx | BioNTech vs. Molecular Partners AG |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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