Correlation Between Universal Health and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Universal Health 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 Universal Health and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Services, and BIONTECH SE DRN, you can compare the effects of market volatilities on Universal Health 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 Universal Health with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and BIONTECH.
Diversification Opportunities for Universal Health and BIONTECH
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and BIONTECH is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services, 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 Universal Health 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 Universal Health Services, 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 Universal Health i.e., Universal Health and BIONTECH go up and down completely randomly.
Pair Corralation between Universal Health and BIONTECH
Assuming the 90 days trading horizon Universal Health Services, is expected to under-perform the BIONTECH. But the stock apears to be less risky and, when comparing its historical volatility, Universal Health Services, is 1.85 times less risky than BIONTECH. The stock trades about -0.12 of its potential returns per unit of risk. The BIONTECH SE DRN is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,439 in BIONTECH SE DRN on November 3, 2024 and sell it today you would lose (7.00) from holding BIONTECH SE DRN or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Services, vs. BIONTECH SE DRN
Performance |
| Timeline |
| Universal Health Ser |
| BIONTECH SE DRN |
Universal Health and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and BIONTECH
The main advantage of trading using opposite Universal Health and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health 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.| Universal Health vs. Brpr Corporate Offices | Universal Health vs. Paycom Software | Universal Health vs. Applied Materials, | Universal Health vs. Martin Marietta Materials, |
| BIONTECH vs. Take Two Interactive Software | BIONTECH vs. SSC Technologies Holdings, | BIONTECH vs. Agilent Technologies | BIONTECH vs. Martin Marietta Materials, |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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