Correlation Between BioNTech and Equinix

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

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

Diversification Opportunities for BioNTech and Equinix

0.56

Correlation Coefficient

BioNTech  Equinix

Very weak diversification

The 3 months correlation between BioNTech and Equinix is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix 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 Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of BioNTech i.e., BioNTech and Equinix go up and down completely randomly.

Pair Corralation between BioNTech and Equinix

Assuming the 90 days trading horizon BioNTech is expected to generate 29.39 times less return on investment than Equinix. In addition to that, BioNTech is 1.62 times more volatile than Equinix. It trades about 0.0 of its total potential returns per unit of risk. Equinix is currently generating about 0.06 per unit of volatility. If you would invest  62,295  in Equinix on October 9, 2024 and sell it today you would earn a total of  30,145  from holding Equinix or generate 48.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

BioNTech SE  vs.  Equinix

BioNTech SE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioNTech SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, BioNTech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Equinix

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equinix are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Equinix reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioNTech and Equinix

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

The idea behind BioNTech SE and Equinix 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.