Correlation Between BioNTech and COMPUTERSHARE

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

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

Diversification Opportunities for BioNTech and COMPUTERSHARE

0.52

Correlation Coefficient

BioNTech  COMPUTERSHARE

Very weak diversification

The 3 months correlation between BioNTech and COMPUTERSHARE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and COMPUTERSHARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUTERSHARE 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 COMPUTERSHARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUTERSHARE has no effect on the direction of BioNTech i.e., BioNTech and COMPUTERSHARE go up and down completely randomly.

Pair Corralation between BioNTech and COMPUTERSHARE

Assuming the 90 days trading horizon BioNTech is expected to generate 6.42 times less return on investment than COMPUTERSHARE. In addition to that, BioNTech is 1.63 times more volatile than COMPUTERSHARE. It trades about 0.01 of its total potential returns per unit of risk. COMPUTERSHARE is currently generating about 0.06 per unit of volatility. If you would invest  1,359  in COMPUTERSHARE on October 10, 2024 and sell it today you would earn a total of  721.00  from holding COMPUTERSHARE or generate 53.05% return on investment over 90 days.

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

BioNTech SE  vs.  COMPUTERSHARE

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 fragile basic indicators, BioNTech exhibited solid returns over the last few months and may actually be approaching a breakup point.

COMPUTERSHARE

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, COMPUTERSHARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioNTech and COMPUTERSHARE

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

The idea behind BioNTech SE and COMPUTERSHARE 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.