Correlation Between GOLD ROAD and BioNTech

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

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

Diversification Opportunities for GOLD ROAD and BioNTech

0.47

Correlation Coefficient

GOLD ROAD  BioNTech

Very weak diversification

The 3 months correlation between GOLD and BioNTech is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and BioNTech go up and down completely randomly.

Pair Corralation between GOLD ROAD and BioNTech

Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.77 times more return on investment than BioNTech. However, GOLD ROAD RES is 1.3 times less risky than BioNTech. It trades about 0.12 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.07 per unit of risk. If you would invest  108.00  in GOLD ROAD RES on October 11, 2024 and sell it today you would earn a total of  18.00  from holding GOLD ROAD RES or generate 16.67% return on investment over 90 days.

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

GOLD ROAD RES  vs.  BioNTech SE

GOLD ROAD RES

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, GOLD ROAD exhibited solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 5 (%) 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 GOLD ROAD and BioNTech

The main advantage of trading using opposite GOLD ROAD and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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 GOLD ROAD RES 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.