Correlation Between BioNTech and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both BioNTech and FTAI Aviation 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 FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and FTAI Aviation Ltd, you can compare the effects of market volatilities on BioNTech and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and FTAI Aviation.
Diversification Opportunities for BioNTech and FTAI Aviation
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BioNTech and FTAI is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of BioNTech i.e., BioNTech and FTAI Aviation go up and down completely randomly.
Pair Corralation between BioNTech and FTAI Aviation
Given the investment horizon of 90 days BioNTech SE is expected to generate 3.51 times more return on investment than FTAI Aviation. However, BioNTech is 3.51 times more volatile than FTAI Aviation Ltd. It trades about 0.11 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.24 per unit of risk. If you would invest 10,897 in BioNTech SE on September 4, 2024 and sell it today you would earn a total of 823.00 from holding BioNTech SE or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNTech SE vs. FTAI Aviation Ltd
Performance |
| Timeline |
| BioNTech SE |
| FTAI Aviation |
BioNTech and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and FTAI Aviation
The main advantage of trading using opposite BioNTech and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.| BioNTech vs. Novavax | BioNTech vs. Ginkgo Bioworks Holdings | BioNTech vs. Crispr Therapeutics AG | BioNTech vs. Ocean Biomedical |
| FTAI Aviation vs. GE Vernova LLC | FTAI Aviation vs. Playtika Holding Corp | FTAI Aviation vs. Kenon Holdings | FTAI Aviation vs. Kinetik Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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