Correlation Between MAHLE Metal and BIONTECH

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

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

Diversification Opportunities for MAHLE Metal and BIONTECH

-0.68

Correlation Coefficient

MAHLE Metal  BIONTECH

Excellent diversification

The 3 months correlation between MAHLE and BIONTECH is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN and MAHLE Metal 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 MAHLE Metal Leve 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 DRN has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and BIONTECH go up and down completely randomly.

Pair Corralation between MAHLE Metal and BIONTECH

Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the BIONTECH. But the stock apears to be less risky and, when comparing its historical volatility, MAHLE Metal Leve is 1.82 times less risky than BIONTECH. The stock trades about -0.09 of its potential returns per unit of risk. The BIONTECH SE DRN is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,062  in BIONTECH SE DRN on September 24, 2024 and sell it today you would earn a total of  288.00  from holding BIONTECH SE DRN or generate 7.09% return on investment over 90 days.

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

MAHLE Metal Leve  vs.  BIONTECH SE DRN

MAHLE Metal Leve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAHLE Metal Leve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

BIONTECH SE DRN

Risk-Adjusted Performance

4 of 100

Modest

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

Pair Trading with MAHLE Metal and BIONTECH

The main advantage of trading using opposite MAHLE Metal and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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 MAHLE Metal Leve and BIONTECH SE DRN 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.