Correlation Between Telefonaktiebolaget and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Telefonaktiebolaget 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 Telefonaktiebolaget and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonaktiebolaget LM Ericsson and BIONTECH SE DRN, you can compare the effects of market volatilities on Telefonaktiebolaget 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 Telefonaktiebolaget with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonaktiebolaget and BIONTECH.
Diversification Opportunities for Telefonaktiebolaget and BIONTECH
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Telefonaktiebolaget and BIONTECH is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Telefonaktiebolaget LM Ericsso 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 Telefonaktiebolaget 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 Telefonaktiebolaget LM Ericsson 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 Telefonaktiebolaget i.e., Telefonaktiebolaget and BIONTECH go up and down completely randomly.
Pair Corralation between Telefonaktiebolaget and BIONTECH
Assuming the 90 days trading horizon Telefonaktiebolaget LM Ericsson is expected to generate 0.83 times more return on investment than BIONTECH. However, Telefonaktiebolaget LM Ericsson is 1.2 times less risky than BIONTECH. It trades about 0.1 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about 0.04 per unit of risk. If you would invest 1,282 in Telefonaktiebolaget LM Ericsson on August 28, 2024 and sell it today you would earn a total of 1,034 from holding Telefonaktiebolaget LM Ericsson or generate 80.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 84.18% |
| Values | Daily Returns |
Telefonaktiebolaget LM Ericsso vs. BIONTECH SE DRN
Performance |
| Timeline |
| Telefonaktiebolaget |
| BIONTECH SE DRN |
Telefonaktiebolaget and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonaktiebolaget and BIONTECH
The main advantage of trading using opposite Telefonaktiebolaget and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonaktiebolaget 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.| Telefonaktiebolaget vs. Monster Beverage | Telefonaktiebolaget vs. Dell Technologies | Telefonaktiebolaget vs. Marfrig Global Foods | Telefonaktiebolaget vs. MAHLE Metal Leve |
| BIONTECH vs. Fras le SA | BIONTECH vs. Clave Indices De | BIONTECH vs. BTG Pactual Logstica | BIONTECH vs. Telefonaktiebolaget LM Ericsson |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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