Correlation Between Expedia and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Expedia 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 Expedia and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expedia Group and BIONTECH SE DRN, you can compare the effects of market volatilities on Expedia 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 Expedia with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expedia and BIONTECH.
Diversification Opportunities for Expedia and BIONTECH
Very weak diversification
The 3 months correlation between Expedia and BIONTECH is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group 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 Expedia 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 Expedia Group 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 Expedia i.e., Expedia and BIONTECH go up and down completely randomly.
Pair Corralation between Expedia and BIONTECH
Assuming the 90 days trading horizon Expedia Group is expected to generate 0.8 times more return on investment than BIONTECH. However, Expedia Group is 1.25 times less risky than BIONTECH. It trades about 0.14 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about 0.11 per unit of risk. If you would invest 34,720 in Expedia Group on September 3, 2024 and sell it today you would earn a total of 22,064 from holding Expedia Group or generate 63.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.33% |
| Values | Daily Returns |
Expedia Group vs. BIONTECH SE DRN
Performance |
| Timeline |
| Expedia Group |
| BIONTECH SE DRN |
Expedia and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expedia and BIONTECH
The main advantage of trading using opposite Expedia and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expedia 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.| Expedia vs. BIONTECH SE DRN | Expedia vs. Raytheon Technologies | Expedia vs. Southwest Airlines Co | Expedia vs. Beyond Meat |
| BIONTECH vs. Dell Technologies | BIONTECH vs. SVB Financial Group | BIONTECH vs. Micron Technology | BIONTECH vs. Verizon Communications |
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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