Correlation Between ZhongAn Online and BioNTech

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

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

Diversification Opportunities for ZhongAn Online and BioNTech

-0.26

Correlation Coefficient

ZhongAn Online  BioNTech

Very good diversification

The 3 months correlation between ZhongAn and BioNTech is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and ZhongAn Online 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 ZhongAn Online P 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 ZhongAn Online i.e., ZhongAn Online and BioNTech go up and down completely randomly.

Pair Corralation between ZhongAn Online and BioNTech

Assuming the 90 days trading horizon ZhongAn Online P is expected to under-perform the BioNTech. In addition to that, ZhongAn Online is 1.58 times more volatile than BioNTech SE. It trades about -0.01 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.05 per unit of volatility. If you would invest  9,376  in BioNTech SE on October 9, 2024 and sell it today you would earn a total of  2,914  from holding BioNTech SE or generate 31.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ZhongAn Online P  vs.  BioNTech SE

ZhongAn Online P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BioNTech SE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ZhongAn Online and BioNTech

The main advantage of trading using opposite ZhongAn Online and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online 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 ZhongAn Online P 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.