Correlation Between Noble Plc and BioNTech
Can any of the company-specific risk be diversified away by investing in both Noble Plc 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 Noble Plc and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble plc and BioNTech SE, you can compare the effects of market volatilities on Noble Plc 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 Noble Plc with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and BioNTech.
Diversification Opportunities for Noble Plc and BioNTech
Modest diversification
The 3 months correlation between Noble and BioNTech is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Noble Plc 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 Noble plc 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 Noble Plc i.e., Noble Plc and BioNTech go up and down completely randomly.
Pair Corralation between Noble Plc and BioNTech
Allowing for the 90-day total investment horizon Noble plc is expected to generate 0.93 times more return on investment than BioNTech. However, Noble plc is 1.08 times less risky than BioNTech. It trades about 0.01 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.02 per unit of risk. If you would invest 3,449 in Noble plc on September 12, 2024 and sell it today you would lose (193.00) from holding Noble plc or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noble plc vs. BioNTech SE
Performance |
| Timeline |
| Noble plc |
| BioNTech SE |
Noble Plc and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Plc and BioNTech
The main advantage of trading using opposite Noble Plc and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Plc 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.| Noble Plc vs. Nabors Industries | Noble Plc vs. Borr Drilling | Noble Plc vs. Transocean | Noble Plc vs. Helmerich and Payne |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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