Correlation Between JD Sports and BioNTech

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

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

Diversification Opportunities for JD Sports and BioNTech

-0.22

Correlation Coefficient

JD Sports  BioNTech

Very good diversification

The 3 months correlation between JDSPY and BioNTech is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and BioNTech go up and down completely randomly.

Pair Corralation between JD Sports and BioNTech

Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the BioNTech. In addition to that, JD Sports is 2.86 times more volatile than BioNTech SE. It trades about -0.28 of its total potential returns per unit of risk. BioNTech SE is currently generating about -0.07 per unit of volatility. If you would invest  9,153  in BioNTech SE on February 2, 2024 and sell it today you would lose (158.00) from holding BioNTech SE or give up 1.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

JD Sports Fashion  vs.  BioNTech SE

JD Sports Fashion

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JD Sports Fashion are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, JD Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BioNTech SE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with JD Sports and BioNTech

The main advantage of trading using opposite JD Sports and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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 JD Sports Fashion 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.