Correlation Between NYSE Composite and BioNTech
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and BioNTech SE, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and BioNTech.
Diversification Opportunities for NYSE Composite and BioNTech
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and BioNTech is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and BioNTech go up and down completely randomly.
Pair Corralation between NYSE Composite and BioNTech
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the BioNTech. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 7.28 times less risky than BioNTech. The index trades about -0.11 of its potential returns per unit of risk. The BioNTech SE is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 10,187 in BioNTech SE on September 18, 2024 and sell it today you would earn a total of 1,552 from holding BioNTech SE or generate 15.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. BioNTech SE
Performance |
| Timeline |
NYSE Composite and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
BioNTech SE
Pair trading matchups for BioNTech
Pair Trading with NYSE Composite and BioNTech
The main advantage of trading using opposite NYSE Composite and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Siriuspoint | NYSE Composite vs. Fomento Economico Mexicano | NYSE Composite vs. Boston Beer | NYSE Composite vs. Ambev SA ADR |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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