Correlation Between Lion One and BioNTech
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and BioNTech SE, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and BioNTech.
Diversification Opportunities for Lion One and BioNTech
Very weak diversification
The 3 months correlation between Lion and BioNTech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and BioNTech go up and down completely randomly.
Pair Corralation between Lion One and BioNTech
Assuming the 90 days horizon Lion One Metals is expected to under-perform the BioNTech. In addition to that, Lion One is 1.58 times more volatile than BioNTech SE. It trades about -0.04 of its total potential returns per unit of risk. BioNTech SE is currently generating about -0.02 per unit of volatility. If you would invest 16,662 in BioNTech SE on September 2, 2024 and sell it today you would lose (4,823) from holding BioNTech SE or give up 28.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. BioNTech SE
Performance |
| Timeline |
| Lion One Metals |
| BioNTech SE |
Lion One and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and BioNTech
The main advantage of trading using opposite Lion One and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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