Correlation Between Highway Holdings and BioNTech
Can any of the company-specific risk be diversified away by investing in both Highway Holdings 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 Highway Holdings and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and BioNTech SE, you can compare the effects of market volatilities on Highway Holdings 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 Highway Holdings with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and BioNTech.
Diversification Opportunities for Highway Holdings and BioNTech
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Highway and BioNTech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Highway Holdings 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 Highway Holdings Limited 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 Highway Holdings i.e., Highway Holdings and BioNTech go up and down completely randomly.
Pair Corralation between Highway Holdings and BioNTech
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 1.16 times more return on investment than BioNTech. However, Highway Holdings is 1.16 times more volatile than BioNTech SE. It trades about 0.01 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.02 per unit of risk. If you would invest 206.00 in Highway Holdings Limited on August 29, 2024 and sell it today you would lose (15.00) from holding Highway Holdings Limited or give up 7.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Highway Holdings Limited vs. BioNTech SE
Performance |
| Timeline |
| Highway Holdings |
| BioNTech SE |
Highway Holdings and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and BioNTech
The main advantage of trading using opposite Highway Holdings and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings 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.| Highway Holdings vs. Dave Warrants | Highway Holdings vs. Evolv Technologies Holdings | Highway Holdings vs. Aquagold International | Highway Holdings vs. Morningstar Unconstrained Allocation |
| BioNTech vs. Eliem Therapeutics | BioNTech vs. Scpharmaceuticals | BioNTech vs. Milestone Pharmaceuticals | BioNTech vs. Seres Therapeutics |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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