Correlation Between Coca Cola and BioNTech
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and BioNTech SE, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and BioNTech.
Diversification Opportunities for Coca Cola and BioNTech
Good diversification
The 3 months correlation between Coca and BioNTech is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and BioNTech go up and down completely randomly.
Pair Corralation between Coca Cola and BioNTech
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 2.96 times less return on investment than BioNTech. But when comparing it to its historical volatility, The Coca Cola is 2.68 times less risky than BioNTech. It trades about 0.11 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 11,530 in BioNTech SE on November 3, 2024 and sell it today you would earn a total of 847.00 from holding BioNTech SE or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. BioNTech SE
Performance |
| Timeline |
| Coca Cola |
| BioNTech SE |
Coca Cola and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and BioNTech
The main advantage of trading using opposite Coca Cola and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
| BioNTech vs. Novavax | BioNTech vs. Ginkgo Bioworks Holdings | BioNTech vs. Crispr Therapeutics AG | BioNTech vs. Ocean Biomedical |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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