Correlation Between Cairn Homes and BioNTech
Can any of the company-specific risk be diversified away by investing in both Cairn Homes 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 Cairn Homes and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and BioNTech SE, you can compare the effects of market volatilities on Cairn Homes 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 Cairn Homes with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and BioNTech.
Diversification Opportunities for Cairn Homes and BioNTech
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cairn and BioNTech is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Cairn Homes 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 Cairn Homes PLC 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 Cairn Homes i.e., Cairn Homes and BioNTech go up and down completely randomly.
Pair Corralation between Cairn Homes and BioNTech
Assuming the 90 days trading horizon Cairn Homes is expected to generate 1.12 times less return on investment than BioNTech. But when comparing it to its historical volatility, Cairn Homes PLC is 1.72 times less risky than BioNTech. It trades about 0.1 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,938 in BioNTech SE on September 2, 2024 and sell it today you would earn a total of 2,062 from holding BioNTech SE or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairn Homes PLC vs. BioNTech SE
Performance |
| Timeline |
| Cairn Homes PLC |
| BioNTech SE |
Cairn Homes and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and BioNTech
The main advantage of trading using opposite Cairn Homes and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes 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.| Cairn Homes vs. Rightmove PLC | Cairn Homes vs. Bioventix | Cairn Homes vs. VeriSign | Cairn Homes vs. Games Workshop Group |
| BioNTech vs. Premier Foods PLC | BioNTech vs. Hochschild Mining plc | BioNTech vs. Lindsell Train Investment | BioNTech vs. Roadside Real Estate |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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