Correlation Between Norwegian Cruise and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Norwegian Cruise 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 Norwegian Cruise and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwegian Cruise Line and BIONTECH SE DRN, you can compare the effects of market volatilities on Norwegian Cruise 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 Norwegian Cruise with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Cruise and BIONTECH.
Diversification Opportunities for Norwegian Cruise and BIONTECH
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Norwegian and BIONTECH is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Cruise Line and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN and Norwegian Cruise 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 Norwegian Cruise Line 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 DRN has no effect on the direction of Norwegian Cruise i.e., Norwegian Cruise and BIONTECH go up and down completely randomly.
Pair Corralation between Norwegian Cruise and BIONTECH
Assuming the 90 days trading horizon Norwegian Cruise Line is expected to generate 1.14 times more return on investment than BIONTECH. However, Norwegian Cruise is 1.14 times more volatile than BIONTECH SE DRN. It trades about 0.09 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about 0.07 per unit of risk. If you would invest 9,072 in Norwegian Cruise Line on September 4, 2024 and sell it today you would earn a total of 7,606 from holding Norwegian Cruise Line or generate 83.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Cruise Line vs. BIONTECH SE DRN
Performance |
| Timeline |
| Norwegian Cruise Line |
| BIONTECH SE DRN |
Norwegian Cruise and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Cruise and BIONTECH
The main advantage of trading using opposite Norwegian Cruise and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Cruise 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.| Norwegian Cruise vs. BIONTECH SE DRN | Norwegian Cruise vs. Bemobi Mobile Tech | Norwegian Cruise vs. Livetech da Bahia | Norwegian Cruise vs. Unifique Telecomunicaes SA |
| BIONTECH vs. Vertex Pharmaceuticals Incorporated | BIONTECH vs. Moderna | BIONTECH vs. Bio Techne | BIONTECH vs. Sarepta Therapeutics |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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