Correlation Between BioNTech and Keyence

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

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

Diversification Opportunities for BioNTech and Keyence

0.67

Correlation Coefficient

BioNTech  Keyence

Poor diversification

The 3 months correlation between BioNTech and Keyence is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence 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 Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of BioNTech i.e., BioNTech and Keyence go up and down completely randomly.

Pair Corralation between BioNTech and Keyence

Assuming the 90 days trading horizon BioNTech SE is expected to under-perform the Keyence. In addition to that, BioNTech is 1.44 times more volatile than Keyence. It trades about -0.15 of its total potential returns per unit of risk. Keyence is currently generating about -0.02 per unit of volatility. If you would invest  38,887  in Keyence on December 24, 2024 and sell it today you would lose (1,197) from holding Keyence or give up 3.08% of portfolio value over 90 days.

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

BioNTech SE  vs.  Keyence

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.

Keyence

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Keyence is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BioNTech and Keyence

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

The idea behind BioNTech SE and Keyence 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.