Correlation Between Reliance Industries and BioNTech

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

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

Diversification Opportunities for Reliance Industries and BioNTech

0.0

Correlation Coefficient

Reliance Industries  BioNTech

Pay attention - limited upside

The 3 months correlation between Reliance and BioNTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Industries Ltd and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Reliance Industries 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 Reliance Industries Ltd 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 Reliance Industries i.e., Reliance Industries and BioNTech go up and down completely randomly.

Pair Corralation between Reliance Industries and BioNTech

Assuming the 90 days trading horizon Reliance Industries Ltd is expected to generate 0.55 times more return on investment than BioNTech. However, Reliance Industries Ltd is 1.81 times less risky than BioNTech. It trades about 0.08 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.05 per unit of risk. If you would invest  5,690  in Reliance Industries Ltd on December 25, 2024 and sell it today you would earn a total of  350.00  from holding Reliance Industries Ltd or generate 6.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Reliance Industries Ltd  vs.  BioNTech SE

Reliance Industries

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Reliance Industries Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Reliance Industries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BioNTech SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Reliance Industries and BioNTech

The main advantage of trading using opposite Reliance Industries and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Industries 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 Reliance Industries Ltd 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .