Correlation Between BioNTech and Harley Davidson

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

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

Diversification Opportunities for BioNTech and Harley Davidson

0.38

Correlation Coefficient

BioNTech  Harley Davidson

Weak diversification

The 3 months correlation between BioNTech and Harley is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Harley Davidson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harley Davidson 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 Harley Davidson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harley Davidson has no effect on the direction of BioNTech i.e., BioNTech and Harley Davidson go up and down completely randomly.

Pair Corralation between BioNTech and Harley Davidson

Given the investment horizon of 90 days BioNTech SE is expected to generate 1.12 times more return on investment than Harley Davidson. However, BioNTech is 1.12 times more volatile than Harley Davidson. It trades about 0.02 of its potential returns per unit of risk. Harley Davidson is currently generating about 0.01 per unit of risk. If you would invest  10,435  in BioNTech SE on September 19, 2024 and sell it today you would earn a total of  1,304  from holding BioNTech SE or generate 12.5% return on investment over 90 days.

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

BioNTech SE  vs.  Harley Davidson

BioNTech SE

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Harley Davidson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harley Davidson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BioNTech and Harley Davidson

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

The idea behind BioNTech SE and Harley Davidson 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.