Correlation Between ON Semiconductor and BioNTech
Can any of the company-specific risk be diversified away by investing in both ON Semiconductor 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 ON Semiconductor and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ON Semiconductor and BioNTech SE, you can compare the effects of market volatilities on ON Semiconductor 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 ON Semiconductor with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON Semiconductor and BioNTech.
Diversification Opportunities for ON Semiconductor and BioNTech
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between ON Semiconductor and BioNTech is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ON Semiconductor and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and ON Semiconductor 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 ON Semiconductor 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 ON Semiconductor i.e., ON Semiconductor and BioNTech go up and down completely randomly.
Pair Corralation between ON Semiconductor and BioNTech
Allowing for the 90-day total investment horizon ON Semiconductor is expected to generate 1.37 times less return on investment than BioNTech. But when comparing it to its historical volatility, ON Semiconductor is 1.81 times less risky than BioNTech. It trades about 0.15 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,897 in BioNTech SE on September 4, 2024 and sell it today you would earn a total of 823.00 from holding BioNTech SE or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ON Semiconductor vs. BioNTech SE
Performance |
| Timeline |
| ON Semiconductor |
| BioNTech SE |
ON Semiconductor and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ON Semiconductor and BioNTech
The main advantage of trading using opposite ON Semiconductor and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON Semiconductor 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.| ON Semiconductor vs. Texas Instruments Incorporated | ON Semiconductor vs. Microchip Technology | ON Semiconductor vs. Analog Devices | ON Semiconductor vs. Qorvo Inc |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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