Correlation Between BioNTech and Cheche Group

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

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

Diversification Opportunities for BioNTech and Cheche Group

-0.3

Correlation Coefficient

BioNTech  Cheche Group

Very good diversification

The 3 months correlation between BioNTech and Cheche is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class 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 Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of BioNTech i.e., BioNTech and Cheche Group go up and down completely randomly.

Pair Corralation between BioNTech and Cheche Group

Given the investment horizon of 90 days BioNTech is expected to generate 8.55 times less return on investment than Cheche Group. But when comparing it to its historical volatility, BioNTech SE is 1.73 times less risky than Cheche Group. It trades about 0.03 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  69.00  in Cheche Group Class on October 9, 2024 and sell it today you would earn a total of  26.00  from holding Cheche Group Class or generate 37.68% return on investment over 90 days.

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

BioNTech SE  vs.  Cheche Group Class

BioNTech SE

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Cheche Group Class

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, Cheche Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioNTech and Cheche Group

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

The idea behind BioNTech SE and Cheche Group Class 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.