Correlation Between Anheuser Busch and BioNTech
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch 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 Anheuser Busch and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anheuser Busch Inbev and BioNTech SE, you can compare the effects of market volatilities on Anheuser Busch 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 Anheuser Busch with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and BioNTech.
Diversification Opportunities for Anheuser Busch and BioNTech
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anheuser and BioNTech is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Anheuser Busch 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 Anheuser Busch Inbev 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 has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and BioNTech go up and down completely randomly.
Pair Corralation between Anheuser Busch and BioNTech
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the BioNTech. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch Inbev is 3.77 times less risky than BioNTech. The stock trades about -0.47 of its potential returns per unit of risk. The BioNTech SE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,310 in BioNTech SE on September 1, 2024 and sell it today you would earn a total of 529.00 from holding BioNTech SE or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. BioNTech SE
Performance |
| Timeline |
| Anheuser Busch Inbev |
| BioNTech SE |
Anheuser Busch and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and BioNTech
The main advantage of trading using opposite Anheuser Busch and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch 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.| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
| BioNTech vs. Novavax | BioNTech vs. Ginkgo Bioworks Holdings | BioNTech vs. Crispr Therapeutics AG | BioNTech vs. Ocean Biomedical |
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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