Correlation Between Mid Atlantic and BioNTech
Can any of the company-specific risk be diversified away by investing in both Mid Atlantic 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 Mid Atlantic and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Atlantic Home Health and BioNTech SE, you can compare the effects of market volatilities on Mid Atlantic 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 Mid Atlantic with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Atlantic and BioNTech.
Diversification Opportunities for Mid Atlantic and BioNTech
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mid and BioNTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mid Atlantic Home Health and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Mid Atlantic 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 Mid Atlantic Home Health 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 Mid Atlantic i.e., Mid Atlantic and BioNTech go up and down completely randomly.
Pair Corralation between Mid Atlantic and BioNTech
Given the investment horizon of 90 days Mid Atlantic Home Health is expected to under-perform the BioNTech. In addition to that, Mid Atlantic is 1.89 times more volatile than BioNTech SE. It trades about -0.06 of its total potential returns per unit of risk. BioNTech SE is currently generating about -0.02 per unit of volatility. If you would invest 14,922 in BioNTech SE on February 3, 2024 and sell it today you would lose (5,698) from holding BioNTech SE or give up 38.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mid Atlantic Home Health vs. BioNTech SE
Performance |
Timeline |
Mid Atlantic Home |
BioNTech SE |
Mid Atlantic and BioNTech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mid Atlantic and BioNTech
The main advantage of trading using opposite Mid Atlantic and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Atlantic 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.Mid Atlantic vs. Pennant Group | Mid Atlantic vs. Encompass Health Corp | Mid Atlantic vs. Enhabit | Mid Atlantic vs. Concord Medical Services |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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