Correlation Between Empire Metals and BioNTech
Can any of the company-specific risk be diversified away by investing in both Empire Metals 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 Empire Metals and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Metals Limited and BioNTech SE, you can compare the effects of market volatilities on Empire Metals 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 Empire Metals with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Metals and BioNTech.
Diversification Opportunities for Empire Metals and BioNTech
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Empire and BioNTech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Limited and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Empire Metals 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 Empire Metals Limited 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 Empire Metals i.e., Empire Metals and BioNTech go up and down completely randomly.
Pair Corralation between Empire Metals and BioNTech
Assuming the 90 days trading horizon Empire Metals Limited is expected to under-perform the BioNTech. But the stock apears to be less risky and, when comparing its historical volatility, Empire Metals Limited is 1.19 times less risky than BioNTech. The stock trades about -0.03 of its potential returns per unit of risk. The BioNTech SE is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,042 in BioNTech SE on September 5, 2024 and sell it today you would earn a total of 686.00 from holding BioNTech SE or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Metals Limited vs. BioNTech SE
Performance |
| Timeline |
| Empire Metals Limited |
| BioNTech SE |
Empire Metals and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Metals and BioNTech
The main advantage of trading using opposite Empire Metals and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Metals 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.| Empire Metals vs. Givaudan SA | Empire Metals vs. Antofagasta PLC | Empire Metals vs. Atalaya Mining | Empire Metals vs. Ferrexpo PLC |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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