Correlation Between Metalrgica Riosulense and BIONTECH

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Metalrgica Riosulense 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 Metalrgica Riosulense and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metalrgica Riosulense SA and BIONTECH SE DRN, you can compare the effects of market volatilities on Metalrgica Riosulense 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 Metalrgica Riosulense with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalrgica Riosulense and BIONTECH.

Diversification Opportunities for Metalrgica Riosulense and BIONTECH

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Metalrgica and BIONTECH is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Metalrgica Riosulense SA 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 Metalrgica Riosulense 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 Metalrgica Riosulense SA 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 Metalrgica Riosulense i.e., Metalrgica Riosulense and BIONTECH go up and down completely randomly.

Pair Corralation between Metalrgica Riosulense and BIONTECH

Assuming the 90 days trading horizon Metalrgica Riosulense SA is expected to under-perform the BIONTECH. But the preferred stock apears to be less risky and, when comparing its historical volatility, Metalrgica Riosulense SA is 1.11 times less risky than BIONTECH. The preferred stock trades about -0.12 of its potential returns per unit of risk. The BIONTECH SE DRN is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,330  in BIONTECH SE DRN on September 24, 2024 and sell it today you would earn a total of  20.00  from holding BIONTECH SE DRN or generate 0.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Metalrgica Riosulense SA  vs.  BIONTECH SE DRN

 Performance 
       Timeline  
Metalrgica Riosulense 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Metalrgica Riosulense SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred 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

 
Weak
 
Strong
Insignificant
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.

Metalrgica Riosulense and BIONTECH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Metalrgica Riosulense and BIONTECH

The main advantage of trading using opposite Metalrgica Riosulense and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalrgica Riosulense 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 Metalrgica Riosulense SA 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.
Check out your portfolio center.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios