Correlation Between Modine Manufacturing and BioNTech
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing 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 Modine Manufacturing and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and BioNTech SE, you can compare the effects of market volatilities on Modine Manufacturing 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 Modine Manufacturing with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and BioNTech.
Diversification Opportunities for Modine Manufacturing and BioNTech
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Modine and BioNTech is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing i.e., Modine Manufacturing and BioNTech go up and down completely randomly.
Pair Corralation between Modine Manufacturing and BioNTech
Considering the 90-day investment horizon Modine Manufacturing is expected to under-perform the BioNTech. In addition to that, Modine Manufacturing is 1.32 times more volatile than BioNTech SE. It trades about -0.23 of its total potential returns per unit of risk. BioNTech SE is currently generating about -0.12 per unit of volatility. If you would invest 12,076 in BioNTech SE on September 24, 2024 and sell it today you would lose (768.00) from holding BioNTech SE or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modine Manufacturing vs. BioNTech SE
Performance |
| Timeline |
| Modine Manufacturing |
| BioNTech SE |
Modine Manufacturing and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and BioNTech
The main advantage of trading using opposite Modine Manufacturing and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing 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.| Modine Manufacturing vs. Ford Motor | Modine Manufacturing vs. General Motors | Modine Manufacturing vs. Goodyear Tire Rubber | Modine Manufacturing vs. Li Auto |
| BioNTech vs. Fate Therapeutics | BioNTech vs. Sana Biotechnology | BioNTech vs. Caribou Biosciences | BioNTech vs. Arcus Biosciences |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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