Correlation Between BioNTech and Lotus Technology

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

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

Diversification Opportunities for BioNTech and Lotus Technology

-0.01

Correlation Coefficient

BioNTech  Lotus Technology

Good diversification

The 3 months correlation between BioNTech and Lotus is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Lotus Technology American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology American 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 are associated (or correlated) with Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology American has no effect on the direction of BioNTech i.e., BioNTech and Lotus Technology go up and down completely randomly.

Pair Corralation between BioNTech and Lotus Technology

Given the investment horizon of 90 days BioNTech SE is expected to generate 0.59 times more return on investment than Lotus Technology. However, BioNTech SE is 1.71 times less risky than Lotus Technology. It trades about -0.01 of its potential returns per unit of risk. Lotus Technology American is currently generating about -0.02 per unit of risk. If you would invest  14,567  in BioNTech SE on September 26, 2024 and sell it today you would lose (3,154) from holding BioNTech SE or give up 21.65% of portfolio value over 90 days.

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

BioNTech SE  vs.  Lotus Technology American

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Lotus Technology American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lotus Technology American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BioNTech and Lotus Technology

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

The idea behind BioNTech SE and Lotus Technology American 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.