Correlation Between BioNTech and TRAVELERS

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

By analyzing existing cross correlation between BioNTech SE and TRAVELERS INC 46, you can compare the effects of market volatilities on BioNTech and TRAVELERS 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 TRAVELERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and TRAVELERS.

Diversification Opportunities for BioNTech and TRAVELERS

-0.02

Correlation Coefficient

BioNTech  TRAVELERS

Good diversification

The 3 months correlation between BioNTech and TRAVELERS is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and TRAVELERS INC 46 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVELERS INC 46 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 TRAVELERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVELERS INC 46 has no effect on the direction of BioNTech i.e., BioNTech and TRAVELERS go up and down completely randomly.

Pair Corralation between BioNTech and TRAVELERS

Given the investment horizon of 90 days BioNTech SE is expected to under-perform the TRAVELERS. In addition to that, BioNTech is 2.82 times more volatile than TRAVELERS INC 46. It trades about -0.06 of its total potential returns per unit of risk. TRAVELERS INC 46 is currently generating about 0.1 per unit of volatility. If you would invest  8,841  in TRAVELERS INC 46 on December 25, 2024 and sell it today you would earn a total of  293.00  from holding TRAVELERS INC 46 or generate 3.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.67%
Values	Daily Returns

BioNTech SE  vs.  TRAVELERS INC 46

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.

TRAVELERS INC 46

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVELERS INC 46 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TRAVELERS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BioNTech and TRAVELERS

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

The idea behind BioNTech SE and TRAVELERS INC 46 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.