Correlation Between Europa Metals and BioNTech
Can any of the company-specific risk be diversified away by investing in both Europa 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 Europa Metals and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europa Metals and BioNTech SE, you can compare the effects of market volatilities on Europa 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 Europa Metals with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europa Metals and BioNTech.
Diversification Opportunities for Europa Metals and BioNTech
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Europa and BioNTech is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Europa Metals and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Europa 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 Europa Metals 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 Europa Metals i.e., Europa Metals and BioNTech go up and down completely randomly.
Pair Corralation between Europa Metals and BioNTech
Assuming the 90 days trading horizon Europa Metals is expected to generate 1.47 times more return on investment than BioNTech. However, Europa Metals is 1.47 times more volatile than BioNTech SE. It trades about 0.13 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.05 per unit of risk. If you would invest 105.00 in Europa Metals on September 5, 2024 and sell it today you would earn a total of 95.00 from holding Europa Metals or generate 90.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Europa Metals vs. BioNTech SE
Performance |
| Timeline |
| Europa Metals |
| BioNTech SE |
Europa Metals and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europa Metals and BioNTech
The main advantage of trading using opposite Europa Metals and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europa 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.| Europa Metals vs. Beowulf Mining | Europa Metals vs. Target Healthcare REIT | Europa Metals vs. Thor Mining PLC | Europa Metals vs. AfriTin Mining |
| BioNTech vs. Blackstone Loan Financing | BioNTech vs. PPHE Hotel Group | BioNTech vs. Europa Metals | BioNTech vs. Fulcrum Metals PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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