Correlation Between Mercedes Benz and BioNTech
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz 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 Mercedes Benz and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group AG and BioNTech SE, you can compare the effects of market volatilities on Mercedes Benz 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 Mercedes Benz with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and BioNTech.
Diversification Opportunities for Mercedes Benz and BioNTech
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercedes and BioNTech is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group AG and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Mercedes Benz 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 Mercedes Benz Group AG 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 Mercedes Benz i.e., Mercedes Benz and BioNTech go up and down completely randomly.
Pair Corralation between Mercedes Benz and BioNTech
Assuming the 90 days horizon Mercedes Benz Group AG is expected to generate 0.45 times more return on investment than BioNTech. However, Mercedes Benz Group AG is 2.24 times less risky than BioNTech. It trades about 0.4 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.11 per unit of risk. If you would invest 5,259 in Mercedes Benz Group AG on November 4, 2024 and sell it today you would earn a total of 639.00 from holding Mercedes Benz Group AG or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercedes Benz Group AG vs. BioNTech SE
Performance |
| Timeline |
| Mercedes Benz Group |
| BioNTech SE |
Mercedes Benz and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercedes Benz and BioNTech
The main advantage of trading using opposite Mercedes Benz and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz 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.| Mercedes Benz vs. Live Nation Entertainment | Mercedes Benz vs. PROSIEBENSAT1 MEDIADR4 | Mercedes Benz vs. Townsquare Media | Mercedes Benz vs. Tencent Music Entertainment |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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