Correlation Between Dell Technologies and BIONTECH

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

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

Diversification Opportunities for Dell Technologies and BIONTECH

0.4

Correlation Coefficient

Dell Technologies  BIONTECH

Very weak diversification

The 3 months correlation between Dell and BIONTECH is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dell Technologies and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN and Dell Technologies 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 Dell Technologies 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 DRN has no effect on the direction of Dell Technologies i.e., Dell Technologies and BIONTECH go up and down completely randomly.

Pair Corralation between Dell Technologies and BIONTECH

Assuming the 90 days trading horizon Dell Technologies is expected to under-perform the BIONTECH. In addition to that, Dell Technologies is 1.28 times more volatile than BIONTECH SE DRN. It trades about -0.09 of its total potential returns per unit of risk. BIONTECH SE DRN is currently generating about -0.04 per unit of volatility. If you would invest  4,446  in BIONTECH SE DRN on December 2, 2024 and sell it today you would lose (346.00) from holding BIONTECH SE DRN or give up 7.78% of portfolio value over 90 days.

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

Dell Technologies  vs.  BIONTECH SE DRN

Dell Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dell Technologies 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 technical and fundamental indicators remain somewhat 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.

BIONTECH SE DRN

Risk-Adjusted Performance

Very Weak

Over the last 90 days BIONTECH SE DRN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BIONTECH is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dell Technologies and BIONTECH

The main advantage of trading using opposite Dell Technologies and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dell Technologies 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 Dell Technologies and BIONTECH SE DRN 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.