Correlation Between ALIOR BANK and BioNTech

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

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

Diversification Opportunities for ALIOR BANK and BioNTech

-0.16

Correlation Coefficient

ALIOR BANK  BioNTech

Good diversification

The 3 months correlation between ALIOR and BioNTech is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ALIOR BANK and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and ALIOR BANK 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 ALIOR BANK 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 ALIOR BANK i.e., ALIOR BANK and BioNTech go up and down completely randomly.

Pair Corralation between ALIOR BANK and BioNTech

Assuming the 90 days trading horizon ALIOR BANK is expected to generate 1.74 times less return on investment than BioNTech. But when comparing it to its historical volatility, ALIOR BANK is 1.42 times less risky than BioNTech. It trades about 0.05 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  10,210  in BioNTech SE on October 25, 2024 and sell it today you would earn a total of  790.00  from holding BioNTech SE or generate 7.74% return on investment over 90 days.

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

ALIOR BANK  vs.  BioNTech SE

ALIOR BANK

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ALIOR BANK are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ALIOR BANK is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

BioNTech SE

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 4 (%) 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 ALIOR BANK and BioNTech

The main advantage of trading using opposite ALIOR BANK and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALIOR BANK 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 ALIOR BANK 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.