Correlation Between Cheche Group and BioNTech

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

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

Diversification Opportunities for Cheche Group and BioNTech

-0.16

Correlation Coefficient

Cheche Group  BioNTech

Good diversification

The 3 months correlation between Cheche and BioNTech is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Cheche Group 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 Cheche Group Class are associated (or correlated) with BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Cheche Group i.e., Cheche Group and BioNTech go up and down completely randomly.

Pair Corralation between Cheche Group and BioNTech

Considering the 90-day investment horizon Cheche Group is expected to generate 1.05 times less return on investment than BioNTech. In addition to that, Cheche Group is 1.18 times more volatile than BioNTech SE. It trades about 0.04 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.04 per unit of volatility. If you would invest  11,098  in BioNTech SE on October 23, 2024 and sell it today you would earn a total of  627.00  from holding BioNTech SE or generate 5.65% return on investment over 90 days.

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

Cheche Group Class  vs.  BioNTech SE

Cheche Group Class

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Cheche Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 February 2025.

Pair Trading with Cheche Group and BioNTech

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

The idea behind Cheche Group Class and BioNTech SE 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.