Correlation Between BioNTech and SBM OFFSHORE

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

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

Diversification Opportunities for BioNTech and SBM OFFSHORE

-0.59

Correlation Coefficient

BioNTech  SBM OFFSHORE

Excellent diversification

The 3 months correlation between BioNTech and SBM is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE 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 SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of BioNTech i.e., BioNTech and SBM OFFSHORE go up and down completely randomly.

Pair Corralation between BioNTech and SBM OFFSHORE

Assuming the 90 days trading horizon BioNTech SE is expected to under-perform the SBM OFFSHORE. In addition to that, BioNTech is 1.16 times more volatile than SBM OFFSHORE. It trades about -0.14 of its total potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.16 per unit of volatility. If you would invest  1,672  in SBM OFFSHORE on December 23, 2024 and sell it today you would earn a total of  340.00  from holding SBM OFFSHORE or generate 20.33% return on investment over 90 days.

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

BioNTech SE  vs.  SBM OFFSHORE

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 fragile 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.

SBM OFFSHORE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBM OFFSHORE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, SBM OFFSHORE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioNTech and SBM OFFSHORE

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

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