Correlation Between BioNTech and Cardinal Health

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

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

Diversification Opportunities for BioNTech and Cardinal Health

0.18

Correlation Coefficient

BioNTech  Cardinal Health

Average diversification

The 3 months correlation between BioNTech and Cardinal is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health 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 Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of BioNTech i.e., BioNTech and Cardinal Health go up and down completely randomly.

Pair Corralation between BioNTech and Cardinal Health

Assuming the 90 days trading horizon BioNTech SE is expected to under-perform the Cardinal Health. In addition to that, BioNTech is 1.7 times more volatile than Cardinal Health. It trades about -0.13 of its total potential returns per unit of risk. Cardinal Health is currently generating about 0.1 per unit of volatility. If you would invest  11,335  in Cardinal Health on December 25, 2024 and sell it today you would earn a total of  900.00  from holding Cardinal Health or generate 7.94% return on investment over 90 days.

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

BioNTech SE  vs.  Cardinal Health

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.

Cardinal Health

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Cardinal Health may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BioNTech and Cardinal Health

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

The idea behind BioNTech SE and Cardinal Health 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.