Correlation Between BioNTech and Union Electric
Can any of the company-specific risk be diversified away by investing in both BioNTech and Union Electric 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 Union Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNTech SE and Union Electric, you can compare the effects of market volatilities on BioNTech and Union Electric 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 Union Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Union Electric.
Diversification Opportunities for BioNTech and Union Electric
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between BioNTech and Union is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric 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 Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of BioNTech i.e., BioNTech and Union Electric go up and down completely randomly.
Pair Corralation between BioNTech and Union Electric
Given the investment horizon of 90 days BioNTech SE is expected to under-perform the Union Electric. In addition to that, BioNTech is 1.41 times more volatile than Union Electric. It trades about -0.07 of its total potential returns per unit of risk. Union Electric is currently generating about 0.05 per unit of volatility. If you would invest 8,700 in Union Electric on December 29, 2024 and sell it today you would earn a total of 500.00 from holding Union Electric or generate 5.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 91.8% |
Values | Daily Returns |
BioNTech SE vs. Union Electric
Performance |
Timeline |
BioNTech SE |
Union Electric |
BioNTech and Union Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BioNTech and Union Electric
The main advantage of trading using opposite BioNTech and Union Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNTech position performs unexpectedly, Union Electric 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 Union Electric will offset losses from the drop in Union Electric's long position.BioNTech vs. Day One Biopharmaceuticals | BioNTech vs. Mirum Pharmaceuticals | BioNTech vs. Rocket Pharmaceuticals | BioNTech vs. Avidity Biosciences |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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