Correlation Between BioNTech and Equinix
Can any of the company-specific risk be diversified away by investing in both BioNTech and Equinix 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 Equinix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and Equinix, you can compare the effects of market volatilities on BioNTech and Equinix 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 Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Equinix.
Diversification Opportunities for BioNTech and Equinix
Average diversification
The 3 months correlation between BioNTech and Equinix is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix 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 Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of BioNTech i.e., BioNTech and Equinix go up and down completely randomly.
Pair Corralation between BioNTech and Equinix
Given the investment horizon of 90 days BioNTech SE is expected to generate 3.01 times more return on investment than Equinix. However, BioNTech is 3.01 times more volatile than Equinix. It trades about 0.17 of its potential returns per unit of risk. Equinix is currently generating about 0.32 per unit of risk. If you would invest 10,632 in BioNTech SE on September 13, 2024 and sell it today you would earn a total of 1,302 from holding BioNTech SE or generate 12.25% 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. Equinix
Performance |
| Timeline |
| BioNTech SE |
| Equinix |
BioNTech and Equinix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and Equinix
The main advantage of trading using opposite BioNTech and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.| BioNTech vs. Puma Biotechnology | BioNTech vs. Iovance Biotherapeutics | BioNTech vs. Sarepta Therapeutics | BioNTech vs. Day One Biopharmaceuticals |
| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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