Correlation Between GP Investments and BIONTECH
Can any of the company-specific risk be diversified away by investing in both GP Investments 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 GP Investments and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and BIONTECH SE DRN, you can compare the effects of market volatilities on GP Investments 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 GP Investments with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and BIONTECH.
Diversification Opportunities for GP Investments and BIONTECH
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between GPIV33 and BIONTECH is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments 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 GP Investments 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 GP Investments 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 GP Investments i.e., GP Investments and BIONTECH go up and down completely randomly.
Pair Corralation between GP Investments and BIONTECH
Assuming the 90 days trading horizon GP Investments is expected to under-perform the BIONTECH. In addition to that, GP Investments is 1.28 times more volatile than BIONTECH SE DRN. It trades about -0.17 of its total potential returns per unit of risk. BIONTECH SE DRN is currently generating about 0.1 per unit of volatility. If you would invest 4,024 in BIONTECH SE DRN on August 30, 2024 and sell it today you would earn a total of 451.00 from holding BIONTECH SE DRN or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GP Investments vs. BIONTECH SE DRN
Performance |
| Timeline |
| GP Investments |
| BIONTECH SE DRN |
GP Investments and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and BIONTECH
The main advantage of trading using opposite GP Investments and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments 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.| GP Investments vs. Ross Stores | GP Investments vs. Paycom Software | GP Investments vs. MAHLE Metal Leve | GP Investments vs. Bio Techne |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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