Correlation Between Global X and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Global X and BIONTECH 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 Global X and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and BIONTECH SE DRN, you can compare the effects of market volatilities on Global X and BIONTECH 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 Global X with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and BIONTECH.
Diversification Opportunities for Global X and BIONTECH
Very weak diversification
The 3 months correlation between Global and BIONTECH is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN and Global X 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 Global X Funds are associated (or correlated) with BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of Global X i.e., Global X and BIONTECH go up and down completely randomly.
Pair Corralation between Global X and BIONTECH
Assuming the 90 days trading horizon Global X Funds is expected to generate 0.59 times more return on investment than BIONTECH. However, Global X Funds is 1.71 times less risky than BIONTECH. It trades about -0.07 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about -0.08 per unit of risk. If you would invest 4,865 in Global X Funds on November 27, 2024 and sell it today you would lose (115.00) from holding Global X Funds or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. BIONTECH SE DRN
Performance |
| Timeline |
| Global X Funds |
| BIONTECH SE DRN |
Global X and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and BIONTECH
The main advantage of trading using opposite Global X and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, BIONTECH 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 BIONTECH will offset losses from the drop in BIONTECH's long position.| Global X vs. STMicroelectronics NV | Global X vs. Citizens Financial Group, | Global X vs. Ameriprise Financial | Global X vs. Broadridge Financial Solutions, |
| BIONTECH vs. Live Nation Entertainment, | BIONTECH vs. Warner Music Group | BIONTECH vs. Darden Restaurants, | BIONTECH vs. Caesars Entertainment, |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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