Correlation Between BioNTech and PacifiCorp
Can any of the company-specific risk be diversified away by investing in both BioNTech and PacifiCorp 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 PacifiCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and PacifiCorp, you can compare the effects of market volatilities on BioNTech and PacifiCorp 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 PacifiCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and PacifiCorp.
Diversification Opportunities for BioNTech and PacifiCorp
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between BioNTech and PacifiCorp is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and PacifiCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PacifiCorp 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 PacifiCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PacifiCorp has no effect on the direction of BioNTech i.e., BioNTech and PacifiCorp go up and down completely randomly.
Pair Corralation between BioNTech and PacifiCorp
Given the investment horizon of 90 days BioNTech SE is expected to under-perform the PacifiCorp. But the stock apears to be less risky and, when comparing its historical volatility, BioNTech SE is 4.68 times less risky than PacifiCorp. The stock trades about -0.02 of its potential returns per unit of risk. The PacifiCorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,000 in PacifiCorp on September 3, 2024 and sell it today you would earn a total of 2,000 from holding PacifiCorp or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.3% |
| Values | Daily Returns |
BioNTech SE vs. PacifiCorp
Performance |
| Timeline |
| BioNTech SE |
| PacifiCorp |
BioNTech and PacifiCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNTech and PacifiCorp
The main advantage of trading using opposite BioNTech and PacifiCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, PacifiCorp 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 PacifiCorp will offset losses from the drop in PacifiCorp's long position.| BioNTech vs. Novavax | BioNTech vs. Ginkgo Bioworks Holdings | BioNTech vs. Crispr Therapeutics AG | BioNTech vs. Ocean Biomedical |
| PacifiCorp vs. Catalyst Pharmaceuticals | PacifiCorp vs. Atmos Energy | PacifiCorp vs. Antero Midstream Partners | PacifiCorp vs. BioNTech SE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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