Correlation Between Sunny Optical and BioNTech

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

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

Diversification Opportunities for Sunny Optical and BioNTech

0.59

Correlation Coefficient

Sunny Optical  BioNTech

Very weak diversification

The 3 months correlation between Sunny and BioNTech is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Sunny Optical 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 Sunny Optical Technology 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 Sunny Optical i.e., Sunny Optical and BioNTech go up and down completely randomly.

Pair Corralation between Sunny Optical and BioNTech

Assuming the 90 days horizon Sunny Optical is expected to generate 1.24 times less return on investment than BioNTech. In addition to that, Sunny Optical is 1.39 times more volatile than BioNTech SE. It trades about 0.02 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.04 per unit of volatility. If you would invest  9,080  in BioNTech SE on October 8, 2024 and sell it today you would earn a total of  2,180  from holding BioNTech SE or generate 24.01% return on investment over 90 days.

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

Sunny Optical Technology  vs.  BioNTech SE

Sunny Optical Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Optical Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Sunny Optical reported 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 sound basic indicators, BioNTech is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sunny Optical and BioNTech

The main advantage of trading using opposite Sunny Optical and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical 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 Sunny Optical Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.