Correlation Between Induction Healthcare and BioNTech
Can any of the company-specific risk be diversified away by investing in both Induction Healthcare 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 Induction Healthcare and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Induction Healthcare Group and BioNTech SE, you can compare the effects of market volatilities on Induction Healthcare 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 Induction Healthcare with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Induction Healthcare and BioNTech.
Diversification Opportunities for Induction Healthcare and BioNTech
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Induction and BioNTech is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Induction Healthcare Group and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Induction Healthcare 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 Induction Healthcare 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 has no effect on the direction of Induction Healthcare i.e., Induction Healthcare and BioNTech go up and down completely randomly.
Pair Corralation between Induction Healthcare and BioNTech
Assuming the 90 days trading horizon Induction Healthcare Group is expected to generate 0.85 times more return on investment than BioNTech. However, Induction Healthcare Group is 1.18 times less risky than BioNTech. It trades about 0.09 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.07 per unit of risk. If you would invest 850.00 in Induction Healthcare Group on August 31, 2024 and sell it today you would earn a total of 50.00 from holding Induction Healthcare Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Induction Healthcare Group vs. BioNTech SE
Performance |
| Timeline |
| Induction Healthcare |
| BioNTech SE |
Induction Healthcare and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Induction Healthcare and BioNTech
The main advantage of trading using opposite Induction Healthcare and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Induction Healthcare 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.| Induction Healthcare vs. Sydbank | Induction Healthcare vs. Auto Trader Group | Induction Healthcare vs. Cincinnati Financial Corp | Induction Healthcare vs. Synchrony Financial |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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