Correlation Between DeVry Education and BioNTech

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

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

Diversification Opportunities for DeVry Education and BioNTech

0.03

Correlation Coefficient

DeVry Education  BioNTech

Significant diversification

The 3 months correlation between DeVry and BioNTech is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding DeVry Education Group and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and DeVry Education 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 DeVry Education Group 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 DeVry Education i.e., DeVry Education and BioNTech go up and down completely randomly.

Pair Corralation between DeVry Education and BioNTech

Assuming the 90 days horizon DeVry Education is expected to generate 1.71 times less return on investment than BioNTech. But when comparing it to its historical volatility, DeVry Education Group is 1.09 times less risky than BioNTech. It trades about 0.12 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  11,290  in BioNTech SE on October 10, 2024 and sell it today you would earn a total of  1,000.00  from holding BioNTech SE or generate 8.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

DeVry Education Group  vs.  BioNTech SE

DeVry Education Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DeVry Education Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, DeVry Education reported solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BioNTech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DeVry Education and BioNTech

The main advantage of trading using opposite DeVry Education and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeVry Education 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 DeVry Education Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.