Correlation Between CompuGroup Medical and BioNTech

Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical 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 CompuGroup Medical and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CompuGroup Medical AG and BioNTech SE, you can compare the effects of market volatilities on CompuGroup Medical 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 CompuGroup Medical with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and BioNTech.

Diversification Opportunities for CompuGroup Medical and BioNTech

0.07

Correlation Coefficient

CompuGroup Medical  BioNTech

Significant diversification

The 3 months correlation between CompuGroup and BioNTech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and CompuGroup Medical 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 CompuGroup Medical AG 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 CompuGroup Medical i.e., CompuGroup Medical and BioNTech go up and down completely randomly.

Pair Corralation between CompuGroup Medical and BioNTech

Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 8.27 times more return on investment than BioNTech. However, CompuGroup Medical is 8.27 times more volatile than BioNTech SE. It trades about 0.07 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.05 per unit of risk. If you would invest  2,176  in CompuGroup Medical AG on December 26, 2024 and sell it today you would lose (554.00) from holding CompuGroup Medical AG or give up 25.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

CompuGroup Medical AG  vs.  BioNTech SE

CompuGroup Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CompuGroup Medical AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CompuGroup Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with CompuGroup Medical and BioNTech

The main advantage of trading using opposite CompuGroup Medical and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical 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.

The idea behind CompuGroup Medical AG and BioNTech SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.