Correlation Between BioNTech and Custodia Holding

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

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

Diversification Opportunities for BioNTech and Custodia Holding

0.0

Correlation Coefficient

BioNTech  Custodia Holding

Pay attention - limited upside

The 3 months correlation between BioNTech and Custodia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Custodia Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custodia Holding and BioNTech 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 BioNTech SE are associated (or correlated) with Custodia Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custodia Holding has no effect on the direction of BioNTech i.e., BioNTech and Custodia Holding go up and down completely randomly.

Pair Corralation between BioNTech and Custodia Holding

If you would invest  11,290  in BioNTech SE on October 10, 2024 and sell it today you would earn a total of  1,000.00  from holding BioNTech SE or generate 8.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BioNTech SE  vs.  Custodia Holding AG

BioNTech SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, BioNTech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Custodia Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Custodia Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Custodia Holding is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BioNTech and Custodia Holding

The main advantage of trading using opposite BioNTech and Custodia Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Custodia Holding 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 Custodia Holding will offset losses from the drop in Custodia Holding's long position.

The idea behind BioNTech SE and Custodia Holding AG 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.