Correlation Between CALTAGIRONE EDITORE and BioNTech

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

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

Diversification Opportunities for CALTAGIRONE EDITORE and BioNTech

0.12

Correlation Coefficient

CALTAGIRONE EDITORE  BioNTech

Average diversification

The 3 months correlation between CALTAGIRONE and BioNTech is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CALTAGIRONE EDITORE and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE i.e., CALTAGIRONE EDITORE and BioNTech go up and down completely randomly.

Pair Corralation between CALTAGIRONE EDITORE and BioNTech

Assuming the 90 days trading horizon CALTAGIRONE EDITORE is expected to generate 0.63 times more return on investment than BioNTech. However, CALTAGIRONE EDITORE is 1.58 times less risky than BioNTech. It trades about 0.12 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.04 per unit of risk. If you would invest  117.00  in CALTAGIRONE EDITORE on October 8, 2024 and sell it today you would earn a total of  15.00  from holding CALTAGIRONE EDITORE or generate 12.82% return on investment over 90 days.

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

CALTAGIRONE EDITORE  vs.  BioNTech SE

CALTAGIRONE EDITORE

Risk-Adjusted Performance

9 of 100

OK

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

BioNTech SE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CALTAGIRONE EDITORE and BioNTech

The main advantage of trading using opposite CALTAGIRONE EDITORE and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.