Correlation Between Chevron Corp and BioNTech
Can any of the company-specific risk be diversified away by investing in both Chevron Corp 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 Chevron Corp and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and BioNTech SE, you can compare the effects of market volatilities on Chevron Corp 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 Chevron Corp with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and BioNTech.
Diversification Opportunities for Chevron Corp and BioNTech
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chevron and BioNTech is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Chevron Corp 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 Chevron Corp 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 Chevron Corp i.e., Chevron Corp and BioNTech go up and down completely randomly.
Pair Corralation between Chevron Corp and BioNTech
Considering the 90-day investment horizon Chevron Corp is expected to generate 1.18 times less return on investment than BioNTech. But when comparing it to its historical volatility, Chevron Corp is 2.03 times less risky than BioNTech. It trades about 0.01 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,771 in BioNTech SE on November 27, 2024 and sell it today you would lose (1,073) from holding BioNTech SE or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. BioNTech SE
Performance |
| Timeline |
| Chevron Corp |
| BioNTech SE |
Chevron Corp and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and BioNTech
The main advantage of trading using opposite Chevron Corp and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp 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.| Chevron Corp vs. BP PLC ADR | Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. Petroleo Brasileiro Petrobras | Chevron Corp vs. Suncor Energy |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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