Correlation Between 500 and BioNTech

Can any of the company-specific risk be diversified away by investing in both 500 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 500 and BioNTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 500 and BioNTech SE, you can compare the effects of market volatilities on 500 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 500 with a short position of BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of 500 and BioNTech.

Diversification Opportunities for 500 and BioNTech

0.0

Correlation Coefficient

500  BioNTech

Pay attention - limited upside

The 3 months correlation between 500 and BioNTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 500 and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and 500 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 500 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 500 i.e., 500 and BioNTech go up and down completely randomly.

Pair Corralation between 500 and BioNTech

If you would invest (100.00) in 500 on February 2, 2024 and sell it today you would earn a total of  100.00  from holding 500 or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

500  vs.  BioNTech SE

500

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 500 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, 500 is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

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 500 and BioNTech

The main advantage of trading using opposite 500 and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 500 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 500 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.