Correlation Between Hormel Foods and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Hormel Foods 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 Hormel Foods and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and BIONTECH SE DRN, you can compare the effects of market volatilities on Hormel Foods 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 Hormel Foods with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and BIONTECH.
Diversification Opportunities for Hormel Foods and BIONTECH
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hormel and BIONTECH is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods 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 Hormel Foods 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 Hormel Foods 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 Hormel Foods i.e., Hormel Foods and BIONTECH go up and down completely randomly.
Pair Corralation between Hormel Foods and BIONTECH
Assuming the 90 days trading horizon Hormel Foods is expected to under-perform the BIONTECH. But the stock apears to be less risky and, when comparing its historical volatility, Hormel Foods is 2.08 times less risky than BIONTECH. The stock trades about -0.17 of its potential returns per unit of risk. The BIONTECH SE DRN is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,421 in BIONTECH SE DRN on November 4, 2024 and sell it today you would earn a total of 11.00 from holding BIONTECH SE DRN or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. BIONTECH SE DRN
Performance |
| Timeline |
| Hormel Foods |
| BIONTECH SE DRN |
Hormel Foods and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and BIONTECH
The main advantage of trading using opposite Hormel Foods and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods 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.| Hormel Foods vs. British American Tobacco | Hormel Foods vs. Nordon Indstrias Metalrgicas | Hormel Foods vs. Marfrig Global Foods | Hormel Foods vs. Burlington Stores, |
| BIONTECH vs. MAHLE Metal Leve | BIONTECH vs. DENTSPLY SIRONA | BIONTECH vs. PENN Entertainment, | BIONTECH vs. Delta Air Lines |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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