Correlation Between Korea Electric and BioNTech
Can any of the company-specific risk be diversified away by investing in both Korea Electric 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 Korea Electric and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Electric Power and BioNTech SE, you can compare the effects of market volatilities on Korea Electric 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 Korea Electric with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and BioNTech.
Diversification Opportunities for Korea Electric and BioNTech
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and BioNTech is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Korea Electric 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 Korea Electric Power 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 Korea Electric i.e., Korea Electric and BioNTech go up and down completely randomly.
Pair Corralation between Korea Electric and BioNTech
Considering the 90-day investment horizon Korea Electric is expected to generate 1.23 times less return on investment than BioNTech. But when comparing it to its historical volatility, Korea Electric Power is 1.47 times less risky than BioNTech. It trades about 0.08 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,875 in BioNTech SE on August 28, 2024 and sell it today you would earn a total of 2,201 from holding BioNTech SE or generate 22.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electric Power vs. BioNTech SE
Performance |
| Timeline |
| Korea Electric Power |
| BioNTech SE |
Korea Electric and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and BioNTech
The main advantage of trading using opposite Korea Electric and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric 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.| Korea Electric vs. Dominion Energy | Korea Electric vs. Consolidated Edison | Korea Electric vs. Eversource Energy | Korea Electric vs. FirstEnergy |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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