Correlation Between Curative Biotechnology and BioNTech
Can any of the company-specific risk be diversified away by investing in both Curative Biotechnology 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 Curative Biotechnology and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curative Biotechnology and BioNTech SE, you can compare the effects of market volatilities on Curative Biotechnology 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 Curative Biotechnology with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curative Biotechnology and BioNTech.
Diversification Opportunities for Curative Biotechnology and BioNTech
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Curative and BioNTech is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Curative Biotechnology and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Curative Biotechnology 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 Curative Biotechnology 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 Curative Biotechnology i.e., Curative Biotechnology and BioNTech go up and down completely randomly.
Pair Corralation between Curative Biotechnology and BioNTech
Given the investment horizon of 90 days Curative Biotechnology is expected to generate 4.86 times more return on investment than BioNTech. However, Curative Biotechnology is 4.86 times more volatile than BioNTech SE. It trades about 0.1 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.04 per unit of risk. If you would invest 1.50 in Curative Biotechnology on November 25, 2024 and sell it today you would earn a total of 0.14 from holding Curative Biotechnology or generate 9.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Curative Biotechnology vs. BioNTech SE
Performance |
Timeline |
Curative Biotechnology |
BioNTech SE |
Curative Biotechnology and BioNTech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Curative Biotechnology and BioNTech
The main advantage of trading using opposite Curative Biotechnology and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curative Biotechnology 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.Curative Biotechnology vs. Biotron Limited | ||
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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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