Correlation Between BioNTech and NORFOLK

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

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

Diversification Opportunities for BioNTech and NORFOLK

-0.13

Correlation Coefficient

BioNTech  NORFOLK

Good diversification

The 3 months correlation between BioNTech and NORFOLK is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and NORFOLK SOUTHERN PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORFOLK SOUTHERN PORATION 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 NORFOLK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORFOLK SOUTHERN PORATION has no effect on the direction of BioNTech i.e., BioNTech and NORFOLK go up and down completely randomly.

Pair Corralation between BioNTech and NORFOLK

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the NORFOLK. In addition to that, BioNTech is 2.36 times more volatile than NORFOLK SOUTHERN PORATION. It trades about -0.08 of its total potential returns per unit of risk. NORFOLK SOUTHERN PORATION is currently generating about 0.13 per unit of volatility. If you would invest  6,460  in NORFOLK SOUTHERN PORATION on December 24, 2024 and sell it today you would earn a total of  652.00  from holding NORFOLK SOUTHERN PORATION or generate 10.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

BioNTech SE  vs.  NORFOLK SOUTHERN PORATION

BioNTech SE

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

NORFOLK SOUTHERN PORATION

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NORFOLK SOUTHERN PORATION are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, NORFOLK may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BioNTech and NORFOLK

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

The idea behind BioNTech SE and NORFOLK SOUTHERN PORATION 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.