Correlation Between US GoldMining and BioNTech

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

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

Diversification Opportunities for US GoldMining and BioNTech

0.47

Correlation Coefficient

US GoldMining  BioNTech

Very weak diversification

The 3 months correlation between USGO and BioNTech is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding US GoldMining Common and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and US GoldMining 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 US GoldMining Common 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 US GoldMining i.e., US GoldMining and BioNTech go up and down completely randomly.

Pair Corralation between US GoldMining and BioNTech

Given the investment horizon of 90 days US GoldMining Common is expected to generate 2.3 times more return on investment than BioNTech. However, US GoldMining is 2.3 times more volatile than BioNTech SE. It trades about 0.19 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.14 per unit of risk. If you would invest  510.00  in US GoldMining Common on September 2, 2024 and sell it today you would earn a total of  702.00  from holding US GoldMining Common or generate 137.65% return on investment over 90 days.

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

US GoldMining Common  vs.  BioNTech SE

US GoldMining Common

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in US GoldMining Common are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, US GoldMining displayed solid returns over the last few months and may actually be approaching a breakup point.

BioNTech SE

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioNTech showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with US GoldMining and BioNTech

The main advantage of trading using opposite US GoldMining and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US GoldMining 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 US GoldMining Common 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.