Correlation Between Delta Air and BioNTech

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

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

Diversification Opportunities for Delta Air and BioNTech

-0.21

Correlation Coefficient

Delta Air  BioNTech

Very good diversification

The 3 months correlation between Delta and BioNTech is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Delta Air 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 Delta Air Lines 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 Delta Air i.e., Delta Air and BioNTech go up and down completely randomly.

Pair Corralation between Delta Air and BioNTech

Assuming the 90 days trading horizon Delta Air Lines is expected to generate 0.75 times more return on investment than BioNTech. However, Delta Air Lines is 1.34 times less risky than BioNTech. It trades about 0.05 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.0 per unit of risk. If you would invest  3,836  in Delta Air Lines on October 6, 2024 and sell it today you would earn a total of  1,962  from holding Delta Air Lines or generate 51.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.94%
Values	Daily Returns

Delta Air Lines  vs.  BioNTech SE

Delta Air Lines

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Delta Air unveiled solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, BioNTech is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Delta Air and BioNTech

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

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.