Correlation Between BIONTECH and Alupar Investimento

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

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

Diversification Opportunities for BIONTECH and Alupar Investimento

-0.59

Correlation Coefficient

BIONTECH  Alupar Investimento

Excellent diversification

The 3 months correlation between BIONTECH and Alupar is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Alupar Investimento SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alupar Investimento and BIONTECH 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 BIONTECH SE DRN are associated (or correlated) with Alupar Investimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alupar Investimento has no effect on the direction of BIONTECH i.e., BIONTECH and Alupar Investimento go up and down completely randomly.

Pair Corralation between BIONTECH and Alupar Investimento

Assuming the 90 days trading horizon BIONTECH SE DRN is expected to generate 2.3 times more return on investment than Alupar Investimento. However, BIONTECH is 2.3 times more volatile than Alupar Investimento SA. It trades about 0.17 of its potential returns per unit of risk. Alupar Investimento SA is currently generating about -0.1 per unit of risk. If you would invest  3,102  in BIONTECH SE DRN on September 3, 2024 and sell it today you would earn a total of  1,351  from holding BIONTECH SE DRN or generate 43.55% return on investment over 90 days.

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

BIONTECH SE DRN  vs.  Alupar Investimento SA

BIONTECH SE DRN

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BIONTECH SE DRN are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BIONTECH sustained solid returns over the last few months and may actually be approaching a breakup point.

Alupar Investimento

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alupar Investimento SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with BIONTECH and Alupar Investimento

The main advantage of trading using opposite BIONTECH and Alupar Investimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH position performs unexpectedly, Alupar Investimento 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 Alupar Investimento will offset losses from the drop in Alupar Investimento's long position.

The idea behind BIONTECH SE DRN and Alupar Investimento SA 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.