Correlation Between BioNTech and Graphic Packaging

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

By analyzing existing cross correlation between BioNTech SE and Graphic Packaging Holding, you can compare the effects of market volatilities on BioNTech and Graphic Packaging 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 Graphic Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNTech and Graphic Packaging.

Diversification Opportunities for BioNTech and Graphic Packaging

0.33

Correlation Coefficient

BioNTech  Graphic Packaging

Weak diversification

The 3 months correlation between BioNTech and Graphic is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding 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 are associated (or correlated) with Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of BioNTech i.e., BioNTech and Graphic Packaging go up and down completely randomly.

Pair Corralation between BioNTech and Graphic Packaging

Assuming the 90 days trading horizon BioNTech SE is expected to under-perform the Graphic Packaging. In addition to that, BioNTech is 1.44 times more volatile than Graphic Packaging Holding. It trades about -0.15 of its total potential returns per unit of risk. Graphic Packaging Holding is currently generating about -0.12 per unit of volatility. If you would invest  2,611  in Graphic Packaging Holding on December 24, 2024 and sell it today you would lose (302.00) from holding Graphic Packaging Holding or give up 11.57% of portfolio value over 90 days.

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

BioNTech SE  vs.  Graphic Packaging Holding

BioNTech SE

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Graphic Packaging Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graphic Packaging Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with BioNTech and Graphic Packaging

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

The idea behind BioNTech SE and Graphic Packaging Holding 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.