Correlation Between BioNTech and Coca Cola
Can any of the company-specific risk be diversified away by investing in both BioNTech and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and The Coca Cola, you can compare the effects of market volatilities on BioNTech and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Coca Cola.
Diversification Opportunities for BioNTech and Coca Cola
Good diversification
The 3 months correlation between BioNTech and Coca is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of BioNTech i.e., BioNTech and Coca Cola go up and down completely randomly.
Pair Corralation between BioNTech and Coca Cola
Given the investment horizon of 90 days BioNTech SE is expected to generate 3.25 times more return on investment than Coca Cola. However, BioNTech is 3.25 times more volatile than The Coca Cola. It trades about 0.05 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.05 per unit of risk. If you would invest 9,505 in BioNTech SE on November 3, 2024 and sell it today you would earn a total of 2,872 from holding BioNTech SE or generate 30.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNTech SE vs. The Coca Cola
Performance |
| Timeline |
| BioNTech SE |
| Coca Cola |
BioNTech and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and Coca Cola
The main advantage of trading using opposite BioNTech and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| BioNTech vs. Novavax | BioNTech vs. Ginkgo Bioworks Holdings | BioNTech vs. Crispr Therapeutics AG | BioNTech vs. Ocean Biomedical |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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