Correlation Between BioNTech and Rocket Internet

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

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

Diversification Opportunities for BioNTech and Rocket Internet

-0.68

Correlation Coefficient

BioNTech  Rocket Internet

Excellent diversification

The 3 months correlation between BioNTech and Rocket is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BioNTech SE and Rocket Internet SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocket Internet SE 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 Rocket Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocket Internet SE has no effect on the direction of BioNTech i.e., BioNTech and Rocket Internet go up and down completely randomly.

Pair Corralation between BioNTech and Rocket Internet

Assuming the 90 days trading horizon BioNTech SE is expected to under-perform the Rocket Internet. In addition to that, BioNTech is 1.01 times more volatile than Rocket Internet SE. It trades about -0.15 of its total potential returns per unit of risk. Rocket Internet SE is currently generating about 0.03 per unit of volatility. If you would invest  1,560  in Rocket Internet SE on December 24, 2024 and sell it today you would earn a total of  50.00  from holding Rocket Internet SE or generate 3.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

BioNTech SE  vs.  Rocket Internet SE

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.

Rocket Internet SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rocket Internet SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Rocket Internet is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BioNTech and Rocket Internet

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

The idea behind BioNTech SE and Rocket Internet SE 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.