Correlation Between Made Tech and BioNTech

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

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

Diversification Opportunities for Made Tech and BioNTech

0.01

Correlation Coefficient

Made Tech  BioNTech

Significant diversification

The 3 months correlation between Made and BioNTech is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and Made Tech 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 Made Tech Group 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 Made Tech i.e., Made Tech and BioNTech go up and down completely randomly.

Pair Corralation between Made Tech and BioNTech

Assuming the 90 days trading horizon Made Tech Group is expected to generate 1.77 times more return on investment than BioNTech. However, Made Tech is 1.77 times more volatile than BioNTech SE. It trades about 0.12 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.05 per unit of risk. If you would invest  850.00  in Made Tech Group on September 20, 2024 and sell it today you would earn a total of  1,400  from holding Made Tech Group or generate 164.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.95%
Values	Daily Returns

Made Tech Group  vs.  BioNTech SE

Made Tech Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Made Tech Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Made Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, BioNTech is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Made Tech and BioNTech

The main advantage of trading using opposite Made Tech and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech 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 Made Tech Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.