Correlation Between Transocean and BioNTech
Can any of the company-specific risk be diversified away by investing in both Transocean 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 Transocean and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transocean and BioNTech SE, you can compare the effects of market volatilities on Transocean 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 Transocean with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transocean and BioNTech.
Diversification Opportunities for Transocean and BioNTech
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Transocean and BioNTech is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Transocean and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Transocean 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 Transocean 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 Transocean i.e., Transocean and BioNTech go up and down completely randomly.
Pair Corralation between Transocean and BioNTech
Considering the 90-day investment horizon Transocean is expected to generate 1.3 times more return on investment than BioNTech. However, Transocean is 1.3 times more volatile than BioNTech SE. 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 447.00 in Transocean on September 12, 2024 and sell it today you would lose (49.00) from holding Transocean or give up 10.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transocean vs. BioNTech SE
Performance |
| Timeline |
| Transocean |
| BioNTech SE |
Transocean and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transocean and BioNTech
The main advantage of trading using opposite Transocean and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transocean 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.| Transocean vs. Valneva SE ADR | Transocean vs. Summit Hotel Properties | Transocean vs. Freedom Holding Corp | Transocean vs. Uber Technologies |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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