Correlation Between TechnipFMC PLC and BioNTech

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

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

Diversification Opportunities for TechnipFMC PLC and BioNTech

0.16

Correlation Coefficient

TechnipFMC PLC  BioNTech

Average diversification

The 3 months correlation between TechnipFMC and BioNTech is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE and TechnipFMC PLC 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 TechnipFMC PLC 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 TechnipFMC PLC i.e., TechnipFMC PLC and BioNTech go up and down completely randomly.

Pair Corralation between TechnipFMC PLC and BioNTech

Assuming the 90 days trading horizon TechnipFMC PLC is expected to generate 0.65 times more return on investment than BioNTech. However, TechnipFMC PLC is 1.55 times less risky than BioNTech. It trades about 0.15 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.0 per unit of risk. If you would invest  2,346  in TechnipFMC PLC on September 29, 2024 and sell it today you would earn a total of  438.00  from holding TechnipFMC PLC or generate 18.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

TechnipFMC PLC  vs.  BioNTech SE

TechnipFMC PLC

Risk-Adjusted Performance

11 of 100

Good

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

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. Despite quite persistent essential indicators, BioNTech is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with TechnipFMC PLC and BioNTech

The main advantage of trading using opposite TechnipFMC PLC and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC 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 TechnipFMC PLC 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.