Correlation Between Victorias Secret and BioNTech

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

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

Diversification Opportunities for Victorias Secret and BioNTech

0.06

Correlation Coefficient

Victorias Secret  BioNTech

Significant diversification

The 3 months correlation between Victorias and BioNTech is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Victorias Secret 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 Victorias Secret Co 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 Victorias Secret i.e., Victorias Secret and BioNTech go up and down completely randomly.

Pair Corralation between Victorias Secret and BioNTech

Given the investment horizon of 90 days Victorias Secret Co is expected to under-perform the BioNTech. In addition to that, Victorias Secret is 1.15 times more volatile than BioNTech SE. It trades about -0.3 of its total potential returns per unit of risk. BioNTech SE is currently generating about 0.03 per unit of volatility. If you would invest  12,082  in BioNTech SE on October 10, 2024 and sell it today you would earn a total of  133.00  from holding BioNTech SE or generate 1.1% return on investment over 90 days.

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

Victorias Secret Co  vs.  BioNTech SE

Victorias Secret

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Victorias Secret Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Victorias Secret displayed solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Victorias Secret and BioNTech

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