Correlation Between BIONTECH and Unity Software

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

By analyzing existing cross correlation between BIONTECH SE DRN and Unity Software, you can compare the effects of market volatilities on BIONTECH and Unity Software 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 Unity Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Unity Software.

Diversification Opportunities for BIONTECH and Unity Software

0.45

Correlation Coefficient

BIONTECH  Unity Software

Very weak diversification

The 12 months correlation between BIONTECH and Unity is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Software 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 DRN are associated (or correlated) with Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of BIONTECH i.e., BIONTECH and Unity Software go up and down completely randomly.

Pair Corralation between BIONTECH and Unity Software

Assuming the 90 days trading horizon BIONTECH SE DRN is expected to generate 0.61 times more return on investment than Unity Software. However, BIONTECH SE DRN is 1.64 times less risky than Unity Software. It trades about 0.17 of its potential returns per unit of risk. Unity Software is currently generating about -0.17 per unit of risk. If you would invest  2,953  in BIONTECH SE DRN on March 12, 2024 and sell it today you would earn a total of  364.00  from holding BIONTECH SE DRN or generate 12.33% return on investment over 90 days.

Time Period	12 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BIONTECH SE DRN  vs.  Unity Software

BIONTECH SE DRN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BIONTECH SE DRN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BIONTECH is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Unity Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unity Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BIONTECH and Unity Software

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

The idea behind BIONTECH SE DRN and Unity Software 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.