Correlation Between Equinix and BioNTech
Can any of the company-specific risk be diversified away by investing in both Equinix 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 Equinix and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and BioNTech SE, you can compare the effects of market volatilities on Equinix 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 Equinix with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and BioNTech.
Diversification Opportunities for Equinix and BioNTech
Average diversification
The 3 months correlation between Equinix and BioNTech is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Equinix 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 Equinix 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 Equinix i.e., Equinix and BioNTech go up and down completely randomly.
Pair Corralation between Equinix and BioNTech
Given the investment horizon of 90 days Equinix is expected to generate 1.59 times less return on investment than BioNTech. But when comparing it to its historical volatility, Equinix is 3.01 times less risky than BioNTech. It trades about 0.32 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 10,632 in BioNTech SE on September 13, 2024 and sell it today you would earn a total of 1,302 from holding BioNTech SE or generate 12.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. BioNTech SE
Performance |
| Timeline |
| Equinix |
| BioNTech SE |
Equinix and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and BioNTech
The main advantage of trading using opposite Equinix and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix 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.| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
| BioNTech vs. Puma Biotechnology | BioNTech vs. Iovance Biotherapeutics | BioNTech vs. Sarepta Therapeutics | BioNTech vs. Day One Biopharmaceuticals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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