Correlation Between 00687YAB1 and BioNTech

Can any of the company-specific risk be diversified away by investing in both 00687YAB1 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 00687YAB1 and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ADNT 7 15 APR 28 and BioNTech SE, you can compare the effects of market volatilities on 00687YAB1 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 00687YAB1 with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00687YAB1 and BioNTech.

Diversification Opportunities for 00687YAB1 and BioNTech

0.12

Correlation Coefficient

00687YAB1  BioNTech

Average diversification

The 3 months correlation between 00687YAB1 and BioNTech is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ADNT 7 15 APR 28 and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and 00687YAB1 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 ADNT 7 15 APR 28 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 00687YAB1 i.e., 00687YAB1 and BioNTech go up and down completely randomly.

Pair Corralation between 00687YAB1 and BioNTech

Assuming the 90 days trading horizon ADNT 7 15 APR 28 is expected to generate 0.31 times more return on investment than BioNTech. However, ADNT 7 15 APR 28 is 3.28 times less risky than BioNTech. It trades about -0.01 of its potential returns per unit of risk. BioNTech SE is currently generating about -0.01 per unit of risk. If you would invest  10,309  in ADNT 7 15 APR 28 on September 17, 2024 and sell it today you would lose (49.00) from holding ADNT 7 15 APR 28 or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.31%
Values	Daily Returns

ADNT 7 15 APR 28  vs.  BioNTech SE

ADNT 7 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADNT 7 15 APR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 00687YAB1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BioNTech SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioNTech SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, BioNTech is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 00687YAB1 and BioNTech

The main advantage of trading using opposite 00687YAB1 and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00687YAB1 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 ADNT 7 15 APR 28 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.