Correlation Between BioNTech and Senmiao Technology

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Can any of the company-specific risk be diversified away by investing in both BioNTech and Senmiao Technology 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 Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and Senmiao Technology, you can compare the effects of market volatilities on BioNTech and Senmiao Technology 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 Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Senmiao Technology.

Diversification Opportunities for BioNTech and Senmiao Technology

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between BioNTech and Senmiao is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology 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 Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of BioNTech i.e., BioNTech and Senmiao Technology go up and down completely randomly.

Pair Corralation between BioNTech and Senmiao Technology

Given the investment horizon of 90 days BioNTech SE is expected to generate 0.85 times more return on investment than Senmiao Technology. However, BioNTech SE is 1.18 times less risky than Senmiao Technology. It trades about 0.11 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.0 per unit of risk. If you would invest  8,800  in BioNTech SE on October 3, 2024 and sell it today you would earn a total of  2,595  from holding BioNTech SE or generate 29.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

BioNTech SE  vs.  Senmiao Technology

 Performance 
       Timeline  
BioNTech SE 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, BioNTech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Senmiao Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Senmiao Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Senmiao Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BioNTech and Senmiao Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BioNTech and Senmiao Technology

The main advantage of trading using opposite BioNTech and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Senmiao Technology 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.
The idea behind BioNTech SE and Senmiao Technology 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.
Check out your portfolio center.
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.

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